A central effort in biomedical research concerns the development of materials for sustaining and controlling cell growth. Carbon nanotube based substrates have been shown to support the growth of different kinds of cells (Hu et al 2004 Nano Lett. 4 507-11; Kalbacova et al 2006 Phys. Status Solidi b 13 243; Zanello et al 2006 Nano Lett. 6 562-7); however the underlying molecular mechanisms remain poorly defined. To address the fundamental question of mechanisms by which nanotubes promote bone mitosis and histogenesis, primary calvariae osteoblastic cells were grown on single-walled carbon nanotube thin film (SWNT) substrates. Using a combination of biochemical and optical techniques we demonstrate here that SWNT networks promote cell development through two distinct steps. Initially, SWNTs are absorbed in a process that resembles endocytosis, inducing acute toxicity. Nanotube-mediated cell destruction, however, induces a release of endogenous factors that act to boost the activity of the surviving cells by stimulating the synthesis of extracellular matrix.