Tumor-specific delivery of anticancer drugs by magnetic nanoparticles will maximize the efficacy of the drug and minimize side effects, and reduce systemic toxicity. The magnetic core of these nanoparticles provides an advantage for selective drug targeting as they can be targeted to the tumor site and accumulated in cancer cells by means of an external magnetic field. Magnetic nanoparticles can be coated with Polyamidoamine (PAMAM) dendrimer and loaded with drugs. However, biomedical applications of PAMAM dendrimers are limited due to their toxicity associated with their multiple cationic charges due to terminal NH groups. Modifying the positively charged end groups with negatively charged COOH groups, is a satisfactory strategy for obtaining less toxic PAMAM dendrimers. Gemcitabine being an analogue of deoxycytidine, is an effective anticancer drug. However, clinical benefits of Gemcitabine are limited due to its short biological half-life. The aim of this study was to obtain an effective, less toxic targeted delivery system for Gemcitabine. Half generations, between G4.5 and G7.5, of PAMAM dendrimer coated magnetic nanoparticles (DcMNPs) were synthesized and conjugated with Gemcitabine. TEM images showed nanoscale size (12-14nm) of the nanoparticles. The zeta-potential analysis indicated a decreased negativity of surface charge in drug bound dendrimer compared to the empty nanoparticles. Gemcitabine was effectively conjugated successfully onto the surface of half-generations of PAMAM DcMNPs. It was observed Gemcitabine did not effectively bind to Generations G4 and G5. The highest drug loading was obtained for DcMNPs with Generation 5.5. Empty nanoparticles showed no significant cytotoxicity on SKBR-3 and MCF-7 cells. On the other hand, Gemcitabine loaded nanoparticles were 6.0 fold more toxic on SKBR-3 and 3.0 fold more toxic on MCF-7 cells compared to free Gemcitabine. Gemcitabine loaded on Generation 5.5 DcMNPs showed a higher stability than free Gemcitabine. About 94% of the drug was retained over 6 weeks period, at pH 7.2. Due to their targetability under magnetic field, stability, size distribution, cellular uptake and toxicity characteristics the dendrimeric nanoparticles obtained in this study can be useful a delivery system for Gemcitabine in cancer therapy.