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Dendrimers are well-defined, versatile polymeric architecture with properties resembling biomolecules. Dendritic polymers emerged as outstanding carrier in modern medicine system because of its derivatisable branched architecture and flexibility in modifying it in numerous ways. Dendritic scaffold has been found to be suitable carrier for a variety of drugs including anticancer, anti-viral, anti-bacterial, antitubercular etc., with capacity to improve solubility and bioavailability of poorly soluble drugs. In spite of extensive applicability in pharmaceutical field, the use of dendrimers in biological system is constrained because of inherent toxicity associated with them. This toxicity is attributed to the interaction of surface cationic charge of dendrimers with negatively charged biological membranes in vivo. Interaction of dendrimers with biological membranes results in membrane disruption via nanohole formation, membrane thinning and erosion. Dendrimer toxicity in biological system is generally characterized by hemolytic toxicity, cytotoxicity and hematological toxicity. To minimize this toxicity two strategies have been utilized; first, designing and synthesis of biocompatible dendrimers; and second, masking of peripheral charge of dendrimers by surface engineering. Biocompatible dendrimers can be synthesized by employing biodegradable core and branching units or utilizing intermediates of various metabolic pathways. Dendrimer biocompatibility has been evaluated in vitro and in vivo for efficient presentation of biological performance. Surface engineering masks the cationic charge of dendrimer surface either by neutralization of charge, for example PEGylation, acetylation, carbohydrate and peptide conjugation; or by introducing negative charge such as half generation dendrimers. Neutral and negatively charged dendrimers do not interact with biological environment and hence are compatible for clinical applications as elucidated by various studies examined in this review. Chemical modification of the surface is an important strategy to overcome the toxicity problems associated with the dendrimers. The present review emphasizes on the approaches available to overcome the cationic toxicity inherently associated with the dendrimers.