This study investigates the size distribution of nano/ultrafine particle-bound PAHs (polycyclic aromatic hydrocarbons) and the PAH-associated carcinogenic potency/cytotoxicity of the exhaust from a generator that is fuelled with D100 (pure petroleum diesel) and S20 (v/v = 20% soy-biodiesel/80% D100) and operated at stable energy output loads (0 and 3 kW). A micro-orifice uniform deposit impactor (MOUDI) and a Nano-MOUDI (with aerodynamic diameters of 0.01–18 μm) were used to collect PM samples. The cytotoxicity of the organic solvent extracts of PM samples to the human male monocytic cell strain (U937) was evaluated using the MTT (3-(4,5-dimethyl-thiazol-2-yl)-2,5-diphenyltetrazolium bromide) method. The results indicate that at both loads, using S20 in place of D100 effectively reduced the emissions of DEPs, PAHs in the DEPs, and PAHs-associated BaPeq; furthermore, the unit mass cytotoxicity of ultrafine particles and nano-particles in the DEPs was also lowered (by an average of 52.6%). Therefore, soybean biodiesel (S20) can be used as an alternative fuel to petroleum diesel to reduce the hazards of emissions from diesel engines to human health.