Application of inorganic nanoparticles in diagnosis and therapy has become a critical component in the targeted treatment of diseases. The surface modification of inorganic oxides is important for providing diversity in size, shape, solubility, long-term stability, and attachment of selective functional groups. This Minireview describes the role of polyethylene glycol (PEG) in the surface modification of oxides and focuses on their biomedical applications. Such a PEGylation of surfaces provides “stealth” characteristics to nanomaterials otherwise identified as foreign materials by human body. The role of PEG as structure-directing agent in synthesis of oxides is also presented.