Metal and metal oxide nanoparticles are an important class of materials with numerous applications. Understanding how such nanoparticles interact with living systems is of considerable relevance both from a toxicological and biomedical perspective. The physicochemical features of nanoparticles are sometimes referred to as the synthetic identity, while the acquired properties of nanoparticles in a biological milieu resulting from the adsorption of biomolecules on the surface of the particles can be considered the biological identity. In this article, we explore the dynamic changes in the identity of nanoparticles resulting either from acquisition of a so-called bio-corona or through the process of biotransformation and how this impacts cellular recognition of nanoparticles and toxicological outcomes, with an emphasis on inflammation—an orchestrated host response against harmful stimuli, including pathogens as well as particles.