The specific properties of nanoscale particles, large surface-to-mass ratios and highly reactive surfaces, have increased their commercial application in many fields. However, the same properties are also important for the interaction and bioaccumulation of the nonbiodegradable nanoscale particles in a biological system and are a cause for concern. Hematite (α-Fe₂O₃), being a mineral form of Fe(III) oxide, is one of the most used iron oxides besides magnetite. The aim of our study was the characterization and comparison of biophysical reactivity and toxicological effects of α-Fe₂O₃ nano- (d < 100 nm) and microscale (d < 5 μm) particles in human lung cells. Our study demonstrates that the surface reactivity of nanoscale α-Fe₂O₃ differs from that of microscale particles with respect to the state of agglomeration, radical formation potential, and cellular toxicity. The presence of proteins in culture medium and agglomeration were found to affect the catalytic properties of the hematite nano- and microscale particles. Both the nano- and microscale α-Fe₂O₃ particles were actively taken up by human lung cells in vitro, although they were not found in the nuclei and mitochondria. Significant genotoxic effects were only found at very high particle concentrations (> 50 μg/ml). The nanoscale particles were slightly more potent in causing cyto- and genotoxicity as compared with their microscale counterparts. Both types of particles induced intracellular generation of reactive oxygen species. This study underlines that α-Fe₂O₃ nanoscale particles trigger different toxicological reaction pathways than microscale particles. However, the immediate environment of the particles (biomolecules, physiological properties of medium) modulates their toxicity on the basis of agglomeration rather than their actual size.