Magnetic Iron oxide in nanostructure form with multifunctional properties may play a vital role in myriad biomedical applications. Iron oxide nanoparticles (IONPs) are fabricated via various methods, including thermal decomposition, co-precipitation, polyol, bio-mineralization, and green synthesis processes. Therefore, different researchers produced IONPs via various techniques to show better water permeability, antioxidant activity, biocompatibility, biodegradability, and lower or no toxicity, as advantages compared to commercial magnetic agents used in innovative applications for modern societies. This review explains various fabrication methods of IONPs and their multifunctional properties. Overall, the new advanced approaches, issues and main challenges, surface modification and modern applications of IONPs are considered. Lastly, some future developments and the views in these research areas are also discussed.