Nanotechnology is evolving as a new field that has a potentially high research and clinical impact. Medicine, in particular, could benefit from nanotechnology, due to emerging applications for noninvasive imaging and therapy. One important nanotechnological platform that has shown promise includes the so-called iron oxide nanoparticles. With specific relevance to cancer therapy, iron oxide nanoparticle-based therapy represents an important alternative to conventional chemotherapy, radiation, or surgery. Iron oxide nanoparticles are usually composed of three main components: an iron core, a polymer coating, and functional moieties. The biodegradable iron core can be designed to be superparamagnetic. This is particularly important, if the nanoparticles are to be used as a contrast agent for noninvasive magnetic resonance imaging (MRI). Surrounding the iron core is generally a polymer coating, which not only serves as a protective layer but also is a very important component for transforming nanoparticles into biomedical nanotools for in vivo applications. Finally, different moieties attached to the coating serve as targeting macromolecules, therapeutics payloads, or additional imaging tags. Despite the development of several nanoparticles for biomedical applications, we believe that iron oxide nanoparticles are still the most promising platform that can transform nanotechnology into a conventional medical discipline.