The use of metal and metal oxide nanomaterials (NMs) is experiencing a significant surge in popularity due to their distinctive structures and properties, making them highly attractive for a wide range of applications. This increases the risks of their potential negative impact on organisms if dispersed into the environment. Information about their behavior and transformation upon environmental interactions in aquatic settings is limited. In this study, the influence of naturally excreted biomolecules from the zooplankton Daphnia magna on nanosized Y2O3 of different concentrations was systematically examined in synthetic freshwater in terms of adsorption and eco-corona formation, colloidal stability, transformation, dissolution, and ecotoxicity towards D. magna. The formation of an eco-corona on the surface of the Y2O3 NMs leads to improved colloidal stability and a reduced extent of dissolution. Exposure to the Y2O3 NMs lowered the survival probability of D. magna considerably. The ecotoxic potency was slightly reduced by the formation of the eco-corona, though shown to be particle concentration-specific. Overall, the results highlight the importance of systematic mechanistic and fundamental studies of factors that can affect the environmental fate and ecotoxic potency of NMs.