Multifunctional nanoparticles that actively target specific cells are promising tools for cancer diagnosis and therapy. In this article we review the synthesis and surface chemistry of Fe-Au nanorods and their characterization using microscopy. The diameter of the rods used in this study was selected to be 150-200 nm so that they did not enter the cells. The 80 nm-long Au tips of the nanorods were functionalized with heregulin (HRG), and the micron-long Fe portion was coated with a poly(ethylene glycol) monolayer to minimize non-specific interactions. Nanorods functionalized with HRG were found to preferentially bind to MCF7 cells that express high levels of the receptor tyrosine-protein kinase ErbB2/3. Magnetic tweezers measurements were used to characterize the kinetic properties of the bond between the HRG on the rods and ErbB2/3 on the surface of the cells. The strong magnetization of Fe-Au nanorods makes them excellent candidates for in-vitro and in-vivo imaging, and magnetic therapeutic applications targeting cancer cells in circulation.