The iron oxide nanoparticles (IONPs), possessing both magnetic behavior and semiconductor property, have been extensively used in multifunctional biomedical fields due to their biocompatible, biodegradable and low toxicity, such as anticancer, antibacterial, cell labelling activities. Nevertheless, there are few IONPs in clinical use at present. Some IONPs approved for clinical use have been withdrawn due to insufficient understanding of its biomedical applications. Therefore, a systematic summary of IONPs' preparation and biomedical applications is crucial for the next step of entering clinical practice from experimental stage. This review summarized the existing research in the past decade on the biological interaction of IONPs with animal/cells models, and their clinical applications in human. This review aims to provide cutting-edge knowledge involved with IONPs' biological effects in vivo and in vitro, and improve their smarter design and application in biomedical research and clinic trials.