The widespread biomedical applications of silver and gold nanoparticles (AgNPs and AuNPs, respectively) prompt the need for mechanistic evaluation of their interaction with biomolecules. In biological media, metallic NPs are known to transform by various pathways, especially in the presence of thiols. The interplay between metallic NPs and thiols may lead to unpredictable consequences for the health status of an organism. This study explored the potential events occurring during biotransformation, dissolution, and reformation of NPs in the thiol-rich biological media. The study employed a model system evaluating the interaction of cysteine with small-sized AgNPs and AuNPs. The interplay of cysteine on transformation and reformation pathways of these NPs was experimentally investigated by nuclear magnetic resonance (NMR) spectroscopy and supported by light scattering techniques and transmission electron microscopy (TEM). As the main outcome, Ag- or Au-catalyzed oxidation of cysteine to cystine was found to occur through generation of reactive oxygen species (ROS). Computational simulations confirmed this mechanism and the role of ROS in the oxidative dimerization of biothiol during NPs reformation. The obtained results represent valuable mechanistic data about the complex events during the transport of metallic NPs in thiol-rich biological systems that should be considered for the future biomedical applications of metal-based nanomaterials.