Graphene and its derivatives are being proposed for several important biomedical applications including drug delivery, gene delivery, contrast imaging, and anticancer therapy. Most of these applications demand intravenous injection of graphene and hence evaluation of its hemocompatibility is an essential prerequisite. Herein, both pristine and functionalized graphene are extensively characterized for their interactions with murine macrophage RAW 264.7 cells and human primary blood components. Detailed analyses of the potential uptake by macrophages, effects on its metabolic activity, membrane integrity, induction of reactive oxygen stress, hemolysis, platelet activation, platelet aggregation, coagulation cascade, cytokine induction, immune cell activation, and immune cell suppression are performed using optimized protocols for nanotoxicity evaluation. Electron microscopy, confocal Raman spectral mapping, and confocal fluorescence imaging studies show active interaction of both the graphene systems with macrophage cells, and the reactive oxygen species mediated toxicity effects of hydrophobic pristine samples are significantly reduced by surface functionalization. In the case of hemocompatibility, both types of graphene show excellent compatibility with red blood cells, platelets, and plasma coagulation pathways, and minimal alteration in the cytokine expression by human peripheral blood mononuclear cells. Further, both samples do not cause any premature immune cell activation or suppression up to a relatively high concentration of 75 μg mL−1 after 72 h of incubation under in vitro conditions. This study clearly suggests that the observed toxicity effects of pristine graphene towards macrophage cells can be easily averted by surface functionalization and both the systems show excellent hemocompatibility.