Large bone defects with limited intrinsic regenerative potential represent a major surgical challenge and are associated with a high socio-economic burden and severe reduction in the quality of life. Tissue engineering approaches offer the possibility to induce new functional bone regeneration, with the biomimetic scaffold serving as a bridge to create a microenvironment that enables a regenerative niche at the site of damage. Magnetic nanoparticles have emerged as a potential tool in bone tissue engineering that leverages the inherent magnetism of magnetic nano particles in cellular microenvironments providing direction in enhancing the osteoinductive, osteoconductive and angiogenic properties in the design of scaffolds. There are conflicting opinions and reports on the role of MNPs on these scaffolds, such as the true role of magnetism, the application of external magnetic fields in combination with MNPs, remote delivery of biomechanical stimuli in-vivo and magnetically controlled cell retention or bioactive agent delivery in promoting osteogenesis and angiogenesis. In this review, we focus on the role of magnetic nanoparticles for bone-tissue-engineering applications in both disease modelling and treatment of injuries and disease. We highlight the materials-design pathway from implementation strategy through the selection of materials and fabrication methods to evaluation. We discuss the advances in this field and unmet needs, current challenges in the development of ideal materials for bone-tissue regeneration and emerging strategies in the field.