Engineered nanoparticles have the potential to revolutionize the diagnosis and treatment of many diseases; for example, by allowing the targeted delivery of a drug to particular subsets of cells. However, so far, such nanoparticles have not proved capable of surmounting all of the biological barriers required to achieve this goal. Nevertheless, advances in nanoparticle engineering, as well as advances in understanding the importance of nanoparticle characteristics such as size, shape and surface properties for biological interactions, are creating new opportunities for the development of nanoparticles for therapeutic applications. This Review focuses on recent progress important for the rational design of such nanoparticles and discusses the challenges to realizing the potential of nanoparticles.