In biomedical and environmental applications, as well as manufacture and disposal, the interaction of graphene-based nanomaterials (GBNs) with living cells is inevitable and sometimes crucial. While the cytotoxic properties of GBNs are well established, the mechanisms behind the cytotoxicity remain controversial. In this study, we first utilize a magnetic field to form films with aligned graphene oxide (GO), showing that the alignment of sharp GO edges plays a crucial role in the antibacterial activity. We then demonstrate using model systems that GO unequivocally induces physical disruption of lipid bilayers and that oxidation stems from a direct electron transfer mechanism. Altogether, our results elucidate the physicochemical, edge-based cytotoxicity of GBNs, while providing guidance for the design of engineered surfaces using GBNs. The cytotoxicity of 2D graphene-based nanomaterials (GBNs) is highly important for engineered applications and environmental health. However, the isotropic orientation of GBNs, most notably graphene oxide (GO), in previous experimental studies obscured the interpretation of cytotoxic contributions of nanosheet edges. Here, we investigate the orientation-dependent interaction of GBNs with bacteria using GO composite films. To produce the films, GO nanosheets are aligned in a magnetic field, immobilized by cross-linking of the surrounding matrix, and exposed on the surface through oxidative etching. Characterization by small-angle X-ray scattering and atomic force microscopy confirms that GO nanosheets align progressively well with increasing magnetic field strength and that the alignment is effectively preserved by cross-linking. When contacted with the model bacterium Escherichia coli , GO nanosheets with vertical orientation exhibit enhanced antibacterial activity compared with random and horizontal orientations. Further characterization is performed to explain the enhanced antibacterial activity of the film with vertically aligned GO. Using phospholipid vesicles as a model system, we observe that GO nanosheets induce physical disruption of the lipid bilayer. Additionally, we find substantial GO-induced oxidation of glutathione, a model intracellular antioxidant, paired with limited generation of reactive oxygen species, suggesting that oxidation occurs through a direct electron-transfer mechanism. These physical and chemical mechanisms both require nanosheet penetration of the cell membrane, suggesting that the enhanced antibacterial activity of the film with vertically aligned GO stems from an increased density of edges with a preferential orientation for membrane disruption. The importance of nanosheet penetration for cytotoxicity has direct implications for the design of engineering surfaces using GBNs.