In this review, specific attention is paid to the development of nanostructured magnetic hydroxyapatite (MHAp) and its potential application in controlled drug/gene delivery, tissue engineering, magnetic hyperthermia treatment, and the development of contrast agents for magnetic resonance imaging. Both magnetite and hydroxyapatite materials have excellent prospects in nanomedicine with multifunctional therapeutic approaches. To date, many research articles have focused on biomedical applications of nanomaterials because of which it is very difficult to focus on any particular type of nanomaterial. This study is possibly the first effort to emphasize on the comprehensive assessment of MHAp nanostructures for biomedical applications supported with very recent experimental studies. From basic concepts to the real-life applications, the relevant characteristics of magnetic biomaterials are patented which are briefly discussed. The potential therapeutic and diagnostic ability of MHAp-nanostructured materials make them an ideal platform for future nanomedicine. We hope that this advanced review will provide a better understanding of MHAp and its important features to utilize it as a promising material for multifunctional biomedical applications.