Hyperthermia, the heating of tissue from 41 to 45 °C, has been shown to improve the efficacy of cancer therapy when used in conjunction with irradiation and/or chemotherapy. In this work, hydrogel nanocomposites have been developed that can control the delivery of both heat and a chemotherapeutic agent (e.g. paclitaxel). The nanocomposites studied involve a stealth, poly(ethylene glycol) (PEG)-based system comprised of PEG (n = 1000) methyl ether methacrylate and PEG (n = 400) dimethacrylate with iron oxide nanoparticles physically entrapped within the hydrogel matrices. The capability of the hydrogel nanocomposites to be heated in an alternating magnetic field was demonstrated. The heating of the hydrogel systems was dependent on the crosslinking of the hydrogel network where hydrogels with lower swelling ratios were found to heat to a greater extent than those with higher ratios. In addition, paclitaxel was shown to exhibit non-Fickian release from the hydrogel systems, with the amount of drug released dependent on the hydrogel network structure. Three cell lines: M059K (glioblastoma), MDA MB 231 (breast carcinoma), and A549 (lung adenocarcinoma) were exposed to paclitaxel only, hyperthermia only, and both paclitaxel and hyperthermia to determine if a synergistic cytotoxic effect was possible for these cell lines. The efficacy of paclitaxel was greater with hyperthermia for the A549 cells; however, the M059K and MDA MB 231 did not show the same response.