The challenges of nanoparticles, such as size‐dependent toxicity, nonbiocompatibility, or inability to undergo functionalization for drug conjugation, limit their biomedical application in more than one domain. Oval‐shaped iron@gold core–shell (oFe@Au) magnetic nanoparticles are engineered and their applications in magnetic resonance imaging (MRI), optical coherence tomography (OCT), and controlled drug release, are explored via photo stimulation‐generated hyperthermia. The oFe@Au nanoparticles have a size of 42.57 ± 5.99 nm and consist of 10.76 and 89.24 atomic % of Fe and Au, respectively. Upon photo‐stimulation for 10 and 15 minutes, the levels of cancer cell death induced by methotrexate‐conjugated oFe@Au nanoparticles are sixfold and fourfold higher, respectively, than oFe@Au nanoparticles alone. MRI and OCT confirm the application of these nanoparticles as a contrast agent. Finally, results of in vivo experiments reveal that the temperature is elevated by 13.2 °C, when oFe@Au nanoparticles are irradiated with a 167 mW cm−2 808 nm laser, which results in a significant reduction in tumor volume and scab formation after 7 days, followed by complete disappearance after 14 days. The ability of these nanoparticles to generate heat upon photo‐stimulation also opens new doors for studying hyperthermia‐mediated controlled drug release for cancer therapy. Applications include biomedical engineering, cancer therapy, and theranostics fields.