Improving the oral bioavailability of therapeutic compounds remains a challenging area of research. Polyamidoamine (PAMAM) dendrimers are promising candidates for oral drug delivery due to their well-defined compact structure, versatility of surface functionalities, low polydispersity, and ability to enhance transepithelial transport. However, potential cytotoxicity has hampered the development of PAMAM dendrimers for in vivo applications. In this article, we have systematically modified the surface groups of amine-terminated PAMAM dendrimers with acetyl groups. The effect of this modification on cytotoxicity, permeability, and cellular uptake was investigated on Caco-2 cell monolayers. Cytotoxicity was reduced by more than 10-fold as the number of surface acetyl groups increased while maintaining permeability across the cell monolayers. Furthermore, a decrease in nonspecific binding was evident for surface-modified dendrimers compared to their unmodified counterparts. These studies point to novel strategies for minimizing PAMAM dendrimer toxicity while maximizing their transepithelial permeability.