<p>The successful integration of nanoparticles into biomedical applications requires modulation of their surface properties so that the required biological interaction can be achieved. Herein, we have investigated and compared polyethylene glycol (PEG) and cetyltrimethylammonium bromide (CTAB)-capped cerium oxide nanoparticles (CeO₂-NPs) for multiple biological properties. Both the nanoparticles (NPs) are comprehensively characterized for their physicochemical and morphological features, pH-responsive dispersion behavior, and multiple biological properties including antimicrobial, anticancer, antioxidant, and hemocompatibility. Our studies find that surface capping highly influences the interaction of CeO₂-NPs with biological systems as the PEGylated CeO₂-NPs are completely inactive against bacterial and fungal strains compared to the highly active antimicrobial surfaces of CTAB@CeO₂-NPs. Moreover, the CTAB-capped CeO₂-NPs demonstrate moderate yet slightly enhanced antileishmanial and in vitro anticancer potential against MCF-7 human breast cancer cells. In contrast, PEGylated CeO₂-NPs exhibit slightly improved antioxidant performance. Most importantly, both distinctly capped NPs are found to be non-toxic to human red blood cells (RBCs), demonstrating their safe nature. The study therefore concludes that surface capping plays a significant role in dictating the biological characteristics of cerium oxide nanoparticles, and the NPs can be fabricated to acquire specific biological properties.</p> Graphical Abstract <p></p>