The noteworthy intensification in the development of nanotechnology has led to the development of various types of nanoparticles. The diverse applications of these nanoparticles make them desirable candidate for areas such as drug delivery, coasmetics, medicine, electronics, and contrast agents for magnetic resonance imaging (MRI) and so on. Iron oxide magnetic nanoparticles are a branch of nanoparticles which is specifically being considered as a contrast agent for MRI as well as targeted drug delivery vehicles, angiogenic therapy and chemotherapy as small size gives them advantage to travel intravascular or intracavity actively for drug delivery. Besides the mentioned advantages, the toxicity of the iron oxide magnetic nanoparticles is still less explored. For in vivo applications magnetic nanoparticles should be nontoxic and compatible with the body fluids. These particles tend to degrade in the body hence there is a need to understand the toxicity of the particles as whole and degraded products interacting within the body. Some nanoparticles have demonstrated toxic effects such inflammation, ulceration, and decreases in growth rate, decline in viability and triggering of neurobehavioral alterations in plants and cell lines as well as in animal models. The cause of nanoparticles’ toxicity is attributed to their specific characteristics of great surface to volume ratio, chemical composition, size, and dosage, retention in body, immunogenicity, organ specific toxicity, breakdown and elimination from the body. In the current review paper, we aim to sum up the current knowledge on the toxic effects of different magnetic nanoparticles on cell lines, marine organisms and rodents. We believe that the comprehensive data can provide significant study parameters and recent developments in the field. Thereafter, collecting profound knowledge on the background of the subject matter, will contribute to drive research in this field in a new sustainable direction.