Nanoscience has been considered as one of the most substantial research in modern science. The utilization of nanoparticle (NP) materials provides numerous advantages in biomedical applications due to their unique properties. Among various types of nanoparticles, the magnetic nanoparticles (MNPs) of iron oxide possess intrinsic features, which have been efficiently exploited for biomedical purposes including drug delivery, magnetic resonance imaging, Magnetic‐activated cell sorting, nanobiosensors, hyperthermia, and tissue engineering and regenerative medicine. The size and shape of nanostructures are the main factors affecting the physicochemical features of superparamagnetic iron oxide nanoparticles, which play an important role in the improvement of MNP properties, and can be controlled by appropriate synthesis strategies. On the other hand, the proper modification and functionalization of the surface of iron oxide nanoparticles have significant effects on the improvement of physicochemical and mechanical features, biocompatibility, stability, and surface activity of MNPs. This review focuses on popular methods of fabrication, beneficial surface coatings with regard to the main required features for their biomedical use, as well as new applications.