Nanotechnology is an emerging science involving manipulation of materials at the nanometer scale. There are several exciting prospects for the application of engineered nanomaterials in medicine. However, concerns over adverse and unanticipated effects on human health have also been raised. In fact, the same properties that make engineered nanomaterials attractive from a technological and biomedical perspective could also make these novel materials harmful to human health and the environment. Carbon nanotubes are cylinders of one or several coaxial graphite layer(s) with a diameter in the order of nanometers, and serve as an instructive example of the Janus-like properties of nanomaterials. Numerous in vitro and in vivo studies have shown that carbon nanotubes and/or associated contaminants or catalytic materials that arise during the production process may induce oxidative stress and prominent pulmonary inflammation. Recent studies also suggest some similarities between the pathogenic properties of multi-walled carbon nanotubes and those of asbestos fibers. On the other hand, carbon nanotubes can be readily functionalized and several studies on the use of carbon nanotubes as versatile excipients for drug delivery and imaging of disease processes have been reported, suggesting that carbon nanotubes may have a place in the armamentarium for treatment and monitoring of cancer, infection, and other disease conditions. Nanomedicine is an emerging field that holds great promise; however, close attention to safety issues is required to ensure that the opportunities that carbon nanotubes and other engineered nanoparticles offer can be translated into feasible and safe constructs for the treatment of human disease.