Despite intensive studies on examining the toxicity of nanomaterials (NMs), our current understanding on potential toxicity in relation to size and cellular responses has remained limited. In this work, we have developed a whole-cell based capacitive biosensor (WCB) to determine the biological toxicity of nanoparticles (NPs) using iron oxide (Fe3O4) NPs as models. This WCB chip comprised of an array of capacitor sensors made of gold interdigitated microelectrodes on which living Escherichia coli cells were immobilized. Cells-on-chip was then allowed to interact with different sizes of Fe3O4 NPs (5, 20 and 100 nm) and concentration-depended cellular-responses were measured in terms of change in dielectric properties (capacitance) as a function of applied AC frequency. The WCB response showed smaller-sized Fe3O4 NPs (5 nm) induced maximum change in surface capacitance because of their effective cellular interaction with E. coli cells-on-chip indicating that the cells suffered from severe cellular deformation, which was confirmed by scanning electron microscopic (SEM) examination. Further our results were validated through their cell viability and E. coli responses at the interface of cell-membrane and NPs as a proof-of-concept. WCB response showed a size-dependent shift in maximum response level from 2 µg/ml of 5 nm sized NPs to 4 µg/ml with NP-sizes greater than 20 nm. The developed WCB offered real-time, label-free and noninvasive detection of cellular responses against Fe3O4 NPs' toxicity with speed, simplicity and sensitivity that can be extended to toxicity screening of various other NPs.