The current work aimed to synthesize and characterize titanium dioxide nanoparticles (TiO₂NPs) using quercetin (QE) and evaluate their biological activities, i.e., anti-hemolytic, anti-inflammatory, and cytotoxicity effects. The crystallographic phase and morphology of biosynthesized QE-TiO₂NPs were characterized by XRD (X-Ray Diffraction) and TEM/FE-SEM (Transmission/Field-Emission Scanning Electron Microscopy) micrographs. Functional groups involved in the synthesis process were determined by FTIR spectroscopy (Fourier Transform-Infrared Spectroscopy). Based on the characterization results, selected QE-TiO₂NPs showed a rutile phase, spherical shape, and a size range of 7.3–39 nm. The QE-TiO₂NPs did not show a hemolytic effect. They indicated 95.3% red blood cells (RBCs) membrane stabilization activity and 82.6% inhibition of bovine serum albumin (BSA) denaturation, similar to a standard drug, which proved their anti-inflammatory effects. The attained results from cytotoxicity studies revealed the toxic effects of QE-TiO₂NPs with IC50 values below 100 and 50 μg/mL for human breast cancer cells of MCF-7 and melanoma cancer cells of A375, respectively. These NPs did not significantly affect normal skin fibroblast cells up to 50 μg/mL and only showed a 16% inhibition rate on the cell viability at 100 μg/mL. These NPs also induced excessive ROS generation. This work established the blood/biocompatibility and excellent nanomedical applications of biosynthesized QE-TiO₂NPs.