Recently, iron oxide nanoparticles (NPs) have attracted much consideration due to their unique properties, such as superparamagnetism, surface-to-volume ratio, greater surface area, and easy separation methodology. Various physical, chemical, and biological methods have been adopted to synthesize magnetic NPs with suitable surface chemistry. This review summarizes the methods for the preparation of iron oxide NPs, size and morphology control, and magnetic properties with recent bioengineering, commercial, and industrial applications. Iron oxides exhibit great potential in the fields of life sciences such as biomedicine, agriculture, and environment. Nontoxic conduct and biocompatible applications of magnetic NPs can be enriched further by special surface coating with organic or inorganic molecules, including surfactants, drugs, proteins, starches, enzymes, antibodies, nucleotides, nonionic detergents, and polyelectrolytes. Magnetic NPs can also be directed to an organ, tissue, or tumor using an external magnetic field for hyperthermic treatment of patients. Keeping in mind the current interest in iron NPs, this review is designed to report recent information from synthesis to characterization, and applications of iron NPs.