The combination of magnetism and nanotechnology has presented promising materials: magnetic nanoparticles. These materials have been getting more attention due to their “size‐dependent functionality”. There is a critical size for nanoparticles that their properties change. Materials with various functions can be synthesized with the desired properties since a wide range of polymers including natural and synthetic polymers can be utilized in the production of the magnetic nanoparticles. Furthermore, they can be more selective and specific with the conjugation target‐specific ligands. This structural and functional diversity enables these materials to be used in a wide range of areas. In this review, we discuss the main components of the magnetic nanoparticles and their examples in biomedical applications. They can be used as contrast agents in magnetic resonance imaging; delivery systems in the controlled release of therapeutic agents; supporting materials for separation, isolation, and purification of biomolecules. They can be also functioned in hyperthermia and magnetofection for gene therapy. However, even though their increasing research interest, magnetic nanoparticles still need to be improved to be more popular in the commercial area. We hope that these functional materials will present promising possibilities in nanotechnology and biomedicine in near future.