Terahertz (THz) imaging and sensing technologies are increasingly being used at international airports for security screening purposes and at major medical centers for cancer and burn diagnosis. The emergence of new THz applications has directly resulted in an increased interest regarding the biological effects associated with this frequency range. Knowledge of THz biological effects is also desired for the safe use of THz systems, identification of health hazards, and development of empirically-based safety standards. In this study, we developed a state-of-the-art exposure chamber that allowed for highly controlled and reproducible studies of THz biological effects. This innovative system incorporated an industry grade cell incubator system that permitted a highly controlled exposure environment, where temperatures could be maintained at 37 °C ± 0.1 °C, carbon dioxide (CO2) levels at 5% ± 0.1%, and relative humidity (RH) levels at 95% ± 1%. To maximize the THz power transmitted to the cell culture region inside the humid incubator, a secondary custom micro-chamber was fabricated and incorporated into the system. This micro-chamber shields the THz beam from the incubator environment and could be nitrogen-purged to eliminate water absorption effects. Additionally, a microscope that allowed for real-time visualization of the live cells before, during, and after THz exposure was integrated into the exposure system.