Bacterial cellulose (BC) has been used as a scaffold for tissue regeneration (TR). Improving functional TR requires highly selective strategies for specific cell attraction. Embedding iron oxide nanoparticles into a BC matrix can drive magnetically labeled cells to specific tissues where they may begin to heal injured tissue. This article focuses on characterization and in vitro toxicity assessment of magnetic BC (MBC). We proposed to detect the production of radical oxygen species (ROS), esterase activity, and apoptosis to study cytotoxic interactions of MBC within its bioenvironment. Morphological characterization was performed using scanning electron microscopy where evidence shows that the diameter of MBC fibers compared to BC fibers was 33% smaller, and the pore areas were 25% bigger. Cytotoxicity assays in porcine aortic smooth muscle cells exposed for 24 hours to BC, MBC, and poly(ethylene glycol)-coated MBC (MBC-PEG) reveals 96% viability and 9% ROS production for MBC-PEG. In contrast, 25% of cells exposed to MBC were apoptotic, suggesting that even when the cells were metabolically active, MBC can induce damage. These outcomes support the need for more integral assessment in the hopes of assessing the potential biosafety and uses of nanocomposites for TR. © 2016 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 104A: 2801-2809, 2016.