Iron oxide nanoparticles (MNPs) demonstrate notable benefits in magnetic induction, attributed to their distinctive physical and chemical attributes. Emerging cancer treatment utilizing magnetic fields have also gathered increasing attention in the biomedical field. However, the defects of difficult dispersion and poor biocompatibility of MNPs seriously hinder their application. In order to overcome its inherent defects and maximize the therapeutic potential of MNPs, various functionalized MNPs have been developed, and numerous combined treatment methods based on MNPs have been widely studied. In this review, we compare and analyze the common nanoparticles based on MNPs with different sizes, shapes, and functional modifications. Additionally, we introduced the therapeutic mechanisms of the strategies, such as magnetically controlled targeting, magnetic hyperthermia, and magneto‐mechanical effect, which based on the unique magnetic induction capabilities of MNPs. Finally, main challenges of MNPs as smart nanomaterials were also discussed. This review seeks to offer a thorough overview of MNPs in biomedicine and a new sight for their application in tumor treatment.