There are numerous challenges involved in the diagnosis and treatment of lung cancer. Globally, majority of people suffers from cancerous disease involving throat cancer, lung cancer, stomach cancer, cancerous brain tumor. Among these the most common ones is the lung cancer or lung carcinoma. The leading cause of the lung cancer is the smoking. Around 80% to 90% of deaths are caused due to Non-small cell lung cancer (NSCLC). The inadequate diagnostic techniques and low chances for the survival of lung cancer patients results from the lack of an early prognosis and incompetency in traditional therapies. However, such challenges involved in the prognosis and treatment of lung cancer are on decline with the progression in magnetic nanoparticle (MNP) technology. Many break-through discoveries and inventions have been made in the field of cancer therapy by using magnetic nanoparticles. The implication of nanotechnology has led to the recent advancement in nanomedicine field. This has encouraged the improvement in different therapeutic and diagnosis strategies employing nanotechnology. The generation of immense technological benefits for nanoparticles systems has been accredited to its remarkable nanoscale physico-chemical properties. This in turns provides the early detection of lung cancer and active drugs delivery for an improved theranostics strategy. The present review provides a general idea of the current progression in the therapeutic and prognosis purpose of magnetic nanoparticles. Further, we disclose the development in the lung cancer theranostics by functionalization of magnetic nanoparticles. The established importance of magnetic nanoparticles in the theranostics centers for lung cancer has been revealed in this paper. The challenges existing in the theranostics of lung cancer are addressed through the functioning of magnetic nanoparticles in the process.