Graphene quantum dots (GQDs), zero dimensional carbon materials displaying excellent luminescence properties, show great promise for medical applications such as imaging, drug delivery, biosensors, and novel therapeutics. A deeper understanding of how the properties of GQDs interact with biological systems is essential for these applications. Our work demonstrates that GQDs can efficiently scavenge a number of free radicals and thereby protect cells against oxidative damage. However, upon exposure to blue light, GQDs exhibit significant phototoxicity through increasing intracellular reactive oxygen species (ROS) levels and reducing cell viability, attributable to the generation of free radicals under light excitation. We confirm that light-induced formation of ROS originates from the electron-hole pair and, more importantly, reveal that singlet oxygen is generated by photoexcited GQDs via both energy-transfer and electron-transfer pathways. Moreover, upon light excitation, GQDs accelerate the oxidation of non-enzymic anti-oxidants and promote lipid peroxidation, contributing to the phototoxicity of GQDs. Our results reveal that GQDs can display both anti- and pro-oxidant activities, depending upon light exposure, which will be useful in guiding the safe application and development of potential anticancer/antibacterial applications for GQDs.