Graphene-based materials (GBMs) have broad potential applications in biomedical engineering and biotechnology. However, existing studies regarding biological effects of GBMs often present contradictory or inconclusive results. This work presents a review of published data in order to provide a critical overview of the state of the art. Firstly, the distinct physical-chemical nature of the GBMs available is clarified, as well as the production methods involved. The review then discusses the available in vitro (with bacterial and mammalian cells) and in vivo studies concerning evaluation of GBMs biocompatibility, as well as existing hemocompatibility studies. The biocompatibility issues concerning composite materials that incorporate GBMs are addressed in a separate section, since encapsulation in a polymer matrix modifies biological interactions. The most pertinent questions that should be addressed in future works are also emphasized.