ZnO nanoparticles (NPs) are prone to dissolution, and uncertainty remains whether biological/cellular responses to ZnO NPs are solely due to the release of Zn2+ or whether the NPs themselves have additional toxic effects. We address this by establishing ZnO NP solubility in dispersion media (Dulbecco’s modified Eagle’s medium, DMEM) held under conditions identical to those employed for cell culture (37 °C, 5% CO2, and pH 7.68) and by systematic comparison of cell–NP interaction for three different ZnO NP preparations. For NPs at concentrations up to 5.5 μg ZnO/mL, dissolution is complete (with the majority of the soluble zinc complexed to dissolved ligands in the medium), taking ca. 1 h for uncoated and ca. 6 h for polymer coated ones. Above 5.5 μg/mL, the results are consistent with the formation of zinc carbonate, keeping the solubilized zinc fixed to 67 μM of which only 0.45 μM is as free Zn2+, i.e., not complexed to dissolved ligands. At these relatively high concentrations, NPs with an aliphatic polyether-coating show slower dissolution (i.e., slower free Zn2+ release) and reprecipitation kinetics compared to those of uncoated NPs, requiring more than 48 h to reach thermodynamic equilibrium. Cytotoxicity (MTT) and DNA damage (Comet) assay dose–response curves for three epithelial cell lines suggest that dissolution and reprecipitation dominate for uncoated ZnO NPs. Transmission electron microscopy combined with the monitoring of intracellular Zn2+ concentrations and ZnO–NP interactions with model lipid membranes indicate that an aliphatic polyether coat on ZnO NPs increases cellular uptake, enhancing toxicity by enabling intracellular dissolution and release of Zn2+. Similarly, we demonstrate that needle-like NP morphologies enhance toxicity by apparently frustrating cellular uptake. To limit toxicity, ZnO NPs with nonacicular morphologies and coatings that only weakly interact with cellular membranes are recommended.