In recent years, the use of magnetic nanoparticles (MNPs) in biomedical applications has gained more and more attention. Their unusual properties make them ideal candidates for the advancement of diagnosis, therapy, and imaging applications. This review addresses the use of MNPs in the field of biomedicine encompassing their synthesis, biofunctionalization, and unique physicochemical properties that make them ideal candidates for such applications. The synthesis of magnetic nanoparticles involves a range of techniques that allow for control over particle size, shape, and surface modifications. The most commonly used synthesis techniques that play a crucial role in tailoring the magnetic properties of nanoparticles are summarized in this review. Nevertheless, the main characterization techniques that can be employed after a successful synthesis procedure are also included together with a short description of their biomedical applications. As the field of magnetic nanoparticles in biomedical applications is rapidly evolving, this review aims to serve as a valuable resource, especially for young researchers and medical professionals, offering basic but very useful insights into recent advancements and future prospects in this highly interdisciplinary research topic.