Functionalized carbon nano-onions (f-CNOs) are of great interest as platforms for imaging, diagnostic and therapeutic applications due to their high cellular uptake and low cytotoxicity. To date, the toxicological effects of f-CNOs on vertebrates have not been reported. In this study, the possible biological impact of f-CNOs on zebrafish during development is investigated, evaluating different toxicity end-points such as the survival rate, hatching rate, and heart beat rate. Furthermore, a bio-distribution study of boron dipyrromethene (BODIPY) functionalized CNOs in zebrafish larvae is performed by utilizing inverted selective plane illumination microscopy (iSPIM), due to its intrinsic capability of allowing for fast 3D imaging. Our in vivo findings indicate that f-CNOs exhibit no toxicity, good biocompatibility (in the concentration range of 5–100,μg mL−1) and a homogenous biodistribution in zebrafish larvae.