Magnetic nanoparticles (MNPs) are a special kind of nanomaterials and widely used in biomedical technology applications. Currently they are popularly customized for disease detection and treatment, particularly as drug carriers in drug targeted delivery systems, as a therapeutic in hyperthermia (treating tumors with heat), and as contrast agents in magnetic resonance imaging (MRI). Due to their biocompatibility and superparamagnetic properties, MNPs as next generation drug carriers have great attraction. Although the potential benefits of MNPs are considerable, any potential toxicity associated with these MNPs should be identified distinctly. The drug loading capability and the biomedical properties of MNPs generated by different surface coatings are the most sensitive parameters in toxicity. A lot of organic and inorganic materials are utilized as coating materials for surface functionalization and reducing toxicity of MNPs. pH or temperature sensitivity materials are widely used to manage drug loading and targeted release. In addition, MNPs can be controlled and directed to the desired pathological region by using external magnetic files (EMF). The realization of targeted drug delivery has decreased the dosage and improved the efficiency of drugs, which results in reduced side effects to normal tissues. This review discussed the possible organ toxicities of MNPs and their current advances as a drug delivery vehicle.