Gold nanoparticles (GNPs) are being proposed as contrast agents to enhance X-ray imaging and radiotherapy, seeking to take advantage of the increased X-ray absorption of gold compared to soft tissue. However, there is a great discrepancy between physically predicted increases in X-ray energy deposition and experimentally observed increases in cell killing. In this work, we present the first calculations which take into account the structure of energy deposition in the nanoscale vicinity of GNPs and relate this to biological outcomes, and show for the first time good agreement with experimentally observed cell killing by the combination of X-rays and GNPs. These results are not only relevant to radiotherapy, but also have implications for applications of heavy atom nanoparticles in biological settings or where human exposure is possible because the localised energy deposition high-lighted by these results may cause complex DNA damage, leading to mutation and carcinogenesis.