Dendrimers have generated tremendous interest in the field of drug delivery. Despite indications of their utility as drug carriers, the inherent cytotoxicity associated with polycationic dendrimers acts as a limiting factor to their clinical applications. Many functionalization strategies have been adopted to mask peripheral amines in order to overcome this limitation. The object of the present investigation was to evaluate the effect of functionalization on the toxicological profile of fifth-generation poly(propylene imine) dendrimer (PPI-5.0G). Four forms of functionalized dendrimers, including protected glycine and phenylalanine, and mannose and lactose functionalized poly(propylene imine) (PPI) dendrimer, were synthesized as prospective drug carriers. These dendrimeric systems were evaluated for haemolytic toxicity, cytotoxicity, immunogenicity and haematological parameters. PPI-5.0G demonstrated a positive charge-based time- and concentration-dependent toxicity profile. Functionalization greatly improved the toxicity profile of the parent dendrimer. Hence it is proposed that these functionalized forms of PPI dendrimer have great potential as bio-compatible drug vehicles.