Magnetic nanoparticles (MNPs) have revolutionized cancer therapy by serving as effective drug transporters through active and passive targeting of tumor sites in conjugation with external alternating magnetic fields (AMFs), thus minimizing off-target effects. This precise targeting strategy guarantees a focused and controlled drug release at the tumor site, reducing the drawbacks of standard drug delivery systems and enhancing treatment effectiveness. Magnetic nanoparticles usually follow in magnetic hyperthermia (MHT) therapy, where AMFs raise the temperature at the tumor site, efficiently eliminating cancer cells and presenting a hopeful complement to conventional cancer treatments. In addition, side effects are reduced by launching a smart drug delivery system (SDDSs) in which treatment efficacy is enhanced by reducing the dosage frequency. Intrinsic properties of MNPs are measured when they serve as contrast agents in magnetic resonance imaging (MRI), providing a diagnostic aspect to their therapeutic capabilities and enabling medical professionals to monitor and record treatment outcomes with precision and higher accuracy. This comprehensive review highlights the multifaceted potential of MNPs in reshaping cancer treatment, emphasizing their role in targeted drug delivery, hyperthermia therapy, and imaging applications, and underscoring their transformative impact on the future of oncological care.