We formulated and tested a targeted nanodrug delivery system to help treat life-threatening invasive fungal infections, such as cryptococcal meningitis. Various designs of iron oxide nanoparticles (IONP) (34–40 nm) coated with bovine serum albumin and coated and targeted with amphotericin B (AMB-IONP), were formulated by applying a layer-by-layer approach. The nanoparticles were monodispersed and spherical in shape, and the lead formulation was found to be in an optimum range for nanomedicine with size (≤36 nm), zeta potential (−20 mV), and poly dispersity index (≤0.2), and the drug loading was 13.6 ± 6.9 µg of AMB/mg of IONP. The drug release profile indicated a burst release of up to 3 h, followed by a sustained drug release of up to 72 h. The lead showed a time-dependent cellular uptake in C. albicans and C. glabrata clinical isolates, and exhibited an improved efficacy (16–25-fold) over a marketed conventional AMB-deoxycholate product in susceptibility testing. Intracellular trafficking of AMB-IONP by TEM and confocal laser scanning microscopy confirmed the successful delivery of the AMB payload at and/or inside the fungal cells leading to potential therapeutic advantages over the AMB-deoxycholate product. A short-term stability study at 5 °C and 25 °C for up to two months showed that the lyophilized form was stable.