Iron oxide–reduced graphene oxide (Fe3O4-RGO) nanocomposites have attracted enormous interest in the biomedical field. However, studies on biological response of Fe3O4-RGO nanocomposites at the cellular and molecular level are scarce. This study was designed to synthesize, characterize, and explore the cytotoxicity of Fe3O4-RGO nanocomposites in human liver (HepG2) cells. Potential mechanisms of cytotoxicity of Fe3O4-RGO nanocomposites were further explored through oxidative stress. Prepared samples were characterized by UV-visible spectrophotometer, X-ray diffraction, scanning electron microscopy, transmission electron microscopy, and energy dispersive spectroscopy. The results demonstrated that RGO induce dose-dependent cytotoxicity in HepG2 cells. However, Fe3O4-RGO nanocomposites were not toxic. We further noted that RGO induce apoptosis in HepG2 cells, as evidenced by mitochondrial membrane potential loss, higher caspase-3 enzyme activity, and cell cycle arrest. On the other hand, Fe3O4-RGO nanocomposites did not alter these apoptotic parameters. Moreover, we observed that RGO increases intracellular reactive oxygen species and hydrogen peroxide while decrease antioxidant glutathione. Again, Fe3O4-RGO nanocomposites did not exert oxidative stress. Altogether, we found that RGO significantly induced cytotoxicity, apoptosis and oxidative stress. However, Fe3O4-RGO nanocomposites showed good biocompatibility to HepG2 cells. This study warrants further research to investigate the biological response of Fe3O4-RGO nanocomposites at the gene and molecular level.