Effect of cadmium sulphide nanoparticles (CdSNPs) has been studied in the gills of a fresh water fish Channa punctatus. It was observed that CdSNPs induced higher degree of lipid peroxidation as measured through thiobarbituric acid reactive substances than the CdS bulk particles at identical dosage (50 μg/L) and period of exposure. An exposure of 15 days to CdS bulk particles caused injury to gill epithelium, loss of mucous cells and appearance of higher number of vacuolated cells. Massive degeneration of epithelial and mucous cells was recorded after 30 days of exposure. Whereas the fish exposed to CdSNPs for 15 days showed the presence of a few mucous cells at the apical region of secondary gill lamellae. Thirty days exposure resulted into severe loss of epithelial cells, mucous cells and pillar cells. Scanning electron microscopical observations on gill lamellae showed irregular arrangement of micro-ridges and microbridges in CdS treated fish. These structures were highly disorganized in fish exposed to CdSNPs. Clustering of microbridges was predominant in the gills of fish exposed to CdSNPs for 15 days. Whereas, 30 days of exposure resulted into collapse of micro-ridges and microbridges. These changes have been attributed to higher rate of lipid peroxidation induced by CdSNPs in the gills of fish. We concluded that nano-biointerface is of fundamental importance and needs to be assessed further in a relevant biological medium.