Materials science and technology, with the advent of nanotechnology, has brought about innumerable nanomaterials and multi-functional materials, with intriguing yet profound properties, into the scientific realm. Even a minor functionalization of a nanomaterial brings about vast changes in its properties that could be potentially utilized in various applications, particularly for biological applications, as one of the primary needs at present is for point-of-care devices that can provide swifter, accurate, reliable, and reproducible results for the detection of various physiological conditions, or as elements that could increase the resolution of current bio-imaging procedures. In this regard, iron oxide nanoparticles, a major class of metal oxide nanoparticles, have been sweepingly synthesized, characterized, and studied for their essential properties; there are 14 polymorphs that have been reported so far in the literature. With such a background, this review’s primary focus is the discussion of the different synthesis methods along with their structural, optical, magnetic, rheological and phase transformation properties. Subsequently, the review has been extrapolated to summarize the effective use of these nanoparticles as contrast agents in bio-imaging, therapeutic agents making use of its immune-toxicity and subsequent usage in hyperthermia for the treatment of cancer, electron transfer agents in copious electrochemical based enzymatic or non-enzymatic biosensors and bactericidal coatings over biomaterials to reduce the biofilm formation significantly.