Prostate cancer (PCa) is the most common malignancy in men and the leading cause of death for men all over the world. Early diagnosis is the key to start treatment at an early stage of PCa and to reduce the death toll. Generally, PCa expresses characteristic morphologic features and serum biomarkers; however, early diagnosis is challenging due to its heterogeneity and long-term indolent phase in the early stage. Following positive diagnosis, PCa patients receive conventional treatments including surgery, radiation therapy, androgen deprivation therapy, focal therapy, and chemotherapy to enhance survival time and alleviate PCa-related complications. However, these treatment strategies have both short and long-term side effects, notably impotence, urinary incontinence, erectile dysfunctions, and recurrence of cancer. These limitations warrant the quest for novel PCa theranostic agents with robust diagnostic and therapeutic potentials to lessen the burden of PCa-related suffering. Iron oxide nanoparticles (IONPs) have recently drawn attention for their symmetrical usage in the diagnosis and treatment of several cancer types. Here, we performed a systematic search in four popular online databases (PubMed, Google Scholar, Scopus, and Web of Science) for the articles regarding PCa and IONPs. Published literature confirmed that the surface modification of IONPs with biopolymers and diagnostic biomarkers improved the early diagnosis of PCa, even in the metastatic stage with reliable accuracy and sensitivity. Furthermore, fine-tuning of IONPs with biopolymers, nucleic acids, anticancer drugs, and bioactive compounds can improve the therapeutic efficacy of these anticancer agents against PCa. This review covers the symmetrical use of IONPs in the diagnosis and treatment of PCa, investigates their biocompatibility, and examines their potential as PCa theranostic agents.