To study the toxicity of nanoparticles under relevant conditions, it is important to reproducibly disperse nanoparticles in biological media in in vitro and in vivo studies. Here, single-walled nanotubes (SWNTs) and double-walled nanotubes (DWNTs) were physicochemically and biologically characterized when dispersed in phosphate-buffered saline (PBS) and bovine serum albumin (BSA). BSA-SWNT/DWNT interaction resulted in a reduction of aggregation and an increase in particle stabilization. Based on the protein sequence coverage and protein binding results, DWNTs exhibited higher protein binding than SWNTs. SWNT and DWNT suspensions in the presence of BSA increased interleukin-6 (IL-6) levels and reduced tumor necrosis factor-alpha (TNF-α) levels in A549 cells as compared to corresponding samples in the absence of BSA. We next determined the effects of SWNTs and DWNTs on pulmonary protein modification using bronchoalveolar lavage fluid (BALF) as a surrogate collected form BALB/c mice. The BALF proteins bound to SWNTs (13 proteins) and DWNTs (11 proteins), suggesting that these proteins were associated with blood coagulation pathways. Lastly, we demonstrated the importance of physicochemical and biological alterations of SWNTs and DWNTs when dispersed in biological media, since protein binding may result in the misinterpretation of in vitro results and the activation of protein-regulated biological responses.