Abstract: The biomedical application of biocompatible magnetic nanoparticles is introduced with respect to its composition and structure. It is indicated that polymer-coated magnetic nanoparticles have combined properties of long stability and higher drug loading capacity. The methods for the preparation of polymer-coated magnetite nanoparticles are discussed and compared. The preparation of magnetic nanoparticles with higher magnetization response，higher drug loading capacity，and narrow size distribution is to be researched in the future. For targeting delivery，the magnetic nanoparticles should also have high affinity to the tumor cells and could escape from human RES system. For this purpose，some suggestions have been given.