Immunomagnetic reduction (IMR) is a method to assay biomolecules by utilizing antibody functionalized magnetic nanoparticles. For clinical validation, important analytic performances of assaying carcinoembryonic antigen (CEA) using IMR are characterized. Furthermore, IMR is applied to assay carcinoembryonic antigen (CEA) in human serum for clinical validation. A total of 118 healthy controls and 79 patients with colorectal cancer (CRC) are recruited in this study. For comparison, assays using chemiluminometric immunoassay (CLIA) are also done for quantizing CEA in these serum samples. The results reveal a high correlation in terms of serum CEA concentration detected via IMR and CLIA is found (r = 0.963). However, IMR shows higher clinical sensitivity and specificity than those of CLIA. Moreover, the rate of false positives for smoking subjects is clearly reduced through the use of IMR. All the results demonstrate IMR is a promising alternative assay for serum CEA to diagnose CRC.