Nanotechnology encompasses the design, characterisation, production and application of materials and systems by controlling shape and size at the nanoscale (nanometres). Nanomaterials may differ from other materials because of their relatively large specific surface area, such that surface properties become particularly important. There has been rapid growth in investment in nanotechnology by both the public and private sectors worldwide. In the EU, nanotechnology is expected to become an important strategic contributor to achieving economic gain and societal and individual benefits. At the same time there is continuing scientific uncertainty and controversy about the safety of nanomaterials. It is important to ensure that timely policy development takes this into consideration. Uncertainty about safety may lead to polarised public debate and to business unwillingness to invest further. A clear regulatory framework to address potential health and environmental impacts, within the wider context of evaluating and communicating the benefit-risk balance, must be a core part of Europe's integrated efforts for nanotechnology innovation. While a number of studies have been carried out on the effect of environmental nanoparticles, e.g. from combustion processes, on human health, there is yet no generally acceptable paradigm for safety assessment of nanomaterials in consumer and other products. Therefore, a working group was established to consider issues for the possible impact of nanomaterials on human health focussing specifically on engineered nanomaterials. This represents the first joint initiative between EASAC and the Joint Research Centre of the European Commission. The working group was given the remit to describe the state of the art of benefits and potential risks, current methods for safety assessment, and to evaluate their relevance, identify knowledge gaps in studying the safety of current nanomaterials, and recommend on priorities for nanomaterial research and the regulatory framework. This report focuses on key principles and issues, cross-referencing other sources for detailed information, rather than attempting a comprehensive account of the science. The focus is on human health although environmental effects are also discussed when directly relevant to health