Magnetic nanoparticles (MNPs) accumulate at disease sites with the aid of magnetic fields; biodegradable MNPs can be designed to facilitate drug delivery, influence disease diagnostics, facilitate tissue regeneration and permit protein purification. Because of their limited toxicity, MNPs are widely used in theranostics, simultaneously facilitating diagnostics and therapeutics. To realize therapeutic end points, iron oxide nanoparticle cores (5-30 nm) are encapsulated in a biocompatible polymer shell with drug cargos. Although limited, the toxic potential of MNPs parallels magnetite composition, along with shape, size and surface chemistry. Clearance is hastened by the reticuloendothelial system. To surmount translational barriers, the crystal structure, particle surface and magnetic properties of MNPs need to be optimized. With this in mind, we provide a comprehensive evaluation of advancements in MNP synthesis, functionalization and design, with an eye towards bench-to-bedside translation.