Zinc oxide nanocrystals (ZnO NCs) hold great promise in nanomedicine, with fascinating multifunctional properties. We investigated the therapeutic potential of sol-gel synthesized ZnO NCs with crystal sizes of 52.65 nm and 25.11 nm, focusing on their anti-cancer effects on HepG2 and HT29 cells, antioxidant properties, and antimicrobial activity. Both samples displayed a hexagonal wurtzite ZnO structure, wherein the crystal sizes diminished with lower calcination temperatures according to the XRD. The scanning electron microscopy (SEM) analysis revealed that lowering the calcination temperature resulted in a decrease in the grain size of the ZnO nanocrystals, as expected. This reduction in grain size combined with a decrease in crystal size resulted in a significant 40% reduction in the reflectance of the ZnO nanocrystals in UV-Vis-NIR spectroscopy. In both cell lines, the cytotoxic potential was found to be higher in HepG2 cells. Specifically, when using ZnO nanocrystals (NCs) with a crystal size of 25.11nm, the lowest cell viability was observed at a concentration of 250 μg/ml. Based on oxidative stress index (OSI) values, lower crystal size of ZnO NCs displayed greater effectiveness in HT29 cells, while higher crystal size of ZnO NCs had pronounced effects in HepG2 cells. Moreover, both ZnO NCs, especially 25.11nm size of ZnO NCs at low concentrations, exhibited significant antimicrobial activity against Gram-positive bacteria (E. faecalis, S. aureus) and C. parapsilopsis fungus. These findings emphasize sol-gel ZnO nanocrystals’ potential as versatile agents in nanomedicine, spurring research on targeted cancer therapies and antimicrobial innovations.