Coniferyl alcohol (CA) is a common monolignol and a building block of lignin. The toxicity of monolignol alcohols has been stated in the literature, but there are only few studies suggesting that this is true. We investigated the physiological effects of CA on living plant cells in more detail. Tobacco (Nicotiana tabacum) Bright yellow-2 cells (BY-2) and Nicotiana benthamiana seedlings both showed concentration-dependent growth retardation in response to 0.5–5 mM CA treatment. In some cases, CA addition caused cell death in BY-2 cultures, but this response was dependent on the growth stage of the cells. Based on LC–MS/MS analysis, BY-2 cells did not accumulate the externally supplemented CA, but metabolized it to ferulic acid, ferulic acid glycoside, coniferin, and to some other phenolic compounds. In addition to growth inhibition, CA caused the formation of a lignin-like compound detected by phloroglucinol staining in N. benthamiana roots and occasionally in BY-2 cells. To prevent this, we added potassium iodide (KI, at 5 mM) to overcome the peroxidase-mediated CA polymerization to lignin. KI had, however, toxic effects on its own: in N. benthamiana seedlings, it caused reduction in growth; in BY-2 cells, reduction in growth and cell viability. Surprisingly, CA restored the growth of KI-treated BY-2 cells and N. benthamiana seedlings. Our results suggest that CA at high concentrations is toxic to plant cells.