Magnetic nanoparticles possess many characteristics that make them promising as drug carriers and for use in biomedical applications. They can be attracted or magnetically guided by strong magnetic fields, thus acting as drug carriers. They can also be used for hyperthermia applications, due to the heat they produce in an alternating magnetic field. The resulting temperature increase can be used to modify or inhibit specific cell activities locally, or even to release drugs in a precisely controlled, temperature-increase activated manner. Magnetic nanoparticles can also serve as contrast agents for diagnostic applications such as magnetic resonance imaging.