Graphene is a miracle material with unique physicochemical properties and has a variety of related materials derived from it. Graphene quantum dots (GQDs) are the fluorescent derivative of graphene, and have tremendous applications as drug carrier, biosensing, and bioimaging agents. Like that, other graphene derivatives like graphene oxide (GO), reduced GO, graphene nanoplatelets, etc. also have a variety of biomedical applications. However, some unwanted toxicity effects are reported for graphene-derived materials. The risk and health hazards of the nanoparticles should be eliminated before human exposure. The biocompatibility of the compounds has to be evaluated to ensure their safety. Hence in vitro and in vivo toxicity studies are performed to detect any toxic effects in study cell lines and animals. This chapter focuses on different in vitro and in vivo biocompatibility studies of GQDs and other graphene-derived materials. The biocompatibility study of some other carbon nanostructures like carbon nanotube, fullerene, carbon dot, and nanodiamond are also discussed in this chapter.