Chitosan is a linear polysaccharide and non-toxic bioactive polymer with a wide variety of applications due to its functional properties such as ease of modification, and biodegradability. In this investigation, magnetic cores (FeO) were synthesized using a fabrication method involving coprecipitation of Fe and Fe. Then the magnetic nanoparticles were encapsulated by chitosan layers. In the next step, magnetite-gold composite nanoparticles were synthesized with spherical shapes and sizes ranging from 20 to 30 nm, using sodium citrate as a natural reducing agent. The morphological and physicochemical features of the material were determined using several advanced techniques like FT-IR, ICP analysis, FESEM, EDS, XRD, TEM, XPS and VSM. In the biological part of the present study, the cell viability of FeO, HAuCl, and FeO@CS/AuNPs was very low against human colorectal carcinoma cell lines i.e. Ramos.2G6.4C10, HCT-8 [HRT-18], HCT 116, and HT-29, human gastric cancer cell lines i.e. MKN45, AGS, and KATO III, and human pancreatic cancer cell lines i.e. PANC-1, AsPC-1, and MIA PaCa-2. The IC50 of FeO@CS/AuNPs against Ramos.2G6.4C10, HCT-8 [HRT-18], HCT 116, HT-29, MKN45, AGS, KATO III, PANC-1, AsPC-1, and MIA PaCa-2 cell lines were 385, 429, 264, 286, 442, 498, 561, 513, 528, and 425 μg/mL, respectively. Thereby, the best cytotoxicity results of our FeO@CS/AuNPs were observed in the case of the HCT 116 cell line. Seemingly, the present nanoparticles may be used for the treatment of several types of gastro-duodenal cancers especially colon, gastric, and pancreatic cancers in near future.