Interest in utilizing magnetic nanoparticles (MNP) for biomedical applications has increased considerably over the past two decades. This excitement has been driven in large part by the success of MNPs as contrast agents in magnetic resonance imaging. The recent investigative trend with respect to cancer has continued down a diagnostic path, but has also turned toward concurrent therapy, giving rise to the distinction of MNPs as potential "theranostics". Here we review both the key technical principles of MNPs and ongoing advancement toward a cancer theranostic MNP. Recent progress in diagnostics, hyperthermia treatments, and drug delivery are all considered. We conclude by identifying current barriers to clinical translation of MNPs and offer considerations for their future development.