Bismuth Ferrite (BFO) nanoparticles (BFO-NP) display interesting optical (nonlinear response) and magnetic properties which make them amenable for bio-oriented diagnostic applications as intra- and extra membrane contrast agents. Due to the relatively recent availability of this material in well dispersed nanometric form, its biocompatibility was not known to date. In this study, we present a thorough assessment of the effects of in vitro exposure of human adenocarcinoma (A549), lung squamous carcinoma (NCI-H520), and acute monocytic leukemia (THP-1) cell lines to uncoated and poly(ethylene glycol)-coated BFO-NP in the form of cytotoxicity, haemolytic response and biocompatibility. Our results support the attractiveness of the functional-BFO towards biomedical applications focused on advanced diagnostic imaging.