Herein, we design a rGO-based magnetic nanocomposite by decorating rGO with citrate-coated magnetic nanoparticles (CMNP). The magnetic rGO (mrGO) was modified by phospholipid-polyethylene glycol to prepare PEGylated mrGO, for conjugating with gastrin-releasing peptide receptor (GRPR)-binding peptide (mrGOG). The anticancer drug doxorubicin (DOX) was bound to mrGO (mrGOG) by π-π stacking for drug delivery triggered by the low pH value in the endosome. The mrGOG showed enhanced photothermal effect under NIR irradiation, endorsing its role for dual targeted DOX delivery. With efficient DOX release in the endosomal environment and heat generation from light absorption in the NIR range, mrGOG/DOX could be used for combination chemo-photothermal therapy after intracellular uptake by cancer cells. We characterized the physico-chemical as well as biological properties of the synthesized nanocomposites. The mrGOG is stable in biological buffer solution, showing high biocompatibility and minimum hemolytic properties. Using U87 glioblastoma cells, we confirmed the magnetic drug targeting effect in vitro for selective cancer cell killing. The peptide ligand-mediated targeted delivery increases the efficiency of intracellular uptake of both nanocomposite and DOX up to ~3 times due to the over-expressed GRPR on U87 surface, leading to higher cytotoxicity. The increased cytotoxicity using mrGOG over mrGO was shown from a decreased IC value (0.70 to 0.48 μg/mL) and an increased cell apoptosis rate (19.8% to 47.1%). The IC and apoptosis rate changed further to 0.19 μg/mL and 76.8% in combination with NIR laser irradiation, with the photothermal effect supported from upregulation of heat shock protein HSP70 expression. Using U87 tumor xenograft model created in nude mice, we demonstrated that magnetic guidance after intravenous delivery of mrGOG/DOX could significantly reduce tumor size and prolong animal survival over free DOX and non-magnetic guided groups. Augmented with NIR laser treatment for 5 min, the anti-cancer efficacy significantly improves with elevated cell apoptosis and reduced cell proliferation. Together with safety profiles from hematological as well as major organ histological analysis of treated animals, the mrGOG nanocomposite is an effective nanomaterial for combination chemo-photothermal cancer therapy.