Developments in nanotechnology field, specifically, metal oxide nanoparticles have attracted the attention of researchers due to their unique sensing, electronic, drug delivery, catalysis, optoelectronics, cosmetics, and space applications. Physicochemical methods are used to fabricate nanosized metal oxides; however, drawbacks such as high cost and toxic chemical involvement prevail. Recent researches focus on synthesizing metal oxide nanoparticles through green chemistry which helps in avoiding the involvement of toxic chemicals in the synthesis process. Bacteria, fungi, and plants are the biological sources that are utilized for the green nanoparticle synthesis. Due to drawbacks such as tedious maintenance and the time needed for the nanoparticle formation, plant extracts are widely used in nanoparticle production. In addition, plants are available all over the world and phytosynthesized nanoparticles show comparatively less toxicity towards mammalian cells. Secondary metabolites including flavonoids, terpenoids, and saponins are present in plant extracts, and these are highly responsible for nanoparticle formation and reduction of toxicity. Hence, this article gives an overview of recent developments in the phytosynthesis of metal oxide nanoparticles and their toxic analysis in various cells and animal models. Also, their possible mechanism in normal and cancer cells, pharmaceutical applications, and their efficiency in disease treatment are also discussed.