Iron oxide nanoparticles have attracted a great deal of research interest and have been widely used in bioscience and clinical research including as contrast agents for magnetic resonance imaging, hyperthermia and magnetic field assisted radionuclide therapy. It is therefore important to develop methods, which can provide high-throughput screening of biological responses that can predict toxicity. The use of nanoelectrodes for single cell analysis can play a vital role in this process by providing relatively fast, comprehensive, and cost-effective assessment of cellular responses. We have developed a new method for in vitro study of the toxicity of magnetic nanoparticles (NP) based on the measurement of intracellular reactive oxygen species (ROS) by a novel nanoelectrode. Previous studies have suggested that ROS generation is frequently observed with NP toxicity. We have developed a stable probe for measuring intracellular ROS using platinized carbon nanoelectrodes with a cavity on the tip integrated into a micromanipulator on an upright microscope. Our results show a significant difference for intracellular levels of ROS measured in HEK293 and LNCaP cancer cells before and after exposure to 10 nm size iron oxide NP. These results are markedly different from ROS measured after cell incubation with the same concentration of NP using standard methods where no differences have been detected. In summary we have developed a label-free method for assessing nanoparticle toxicity using the rapid (less than 30 minutes) measurement of ROS with a novel nanoelectrode.