In the biomedical domain, a great attention has been paid to the unique features of magnetic iron oxide nanoparticles and particularly magnetite (Fe3O4) and maghemite (Fe2O3) which emanating from their nano-size and structure. These fascinating properties include superparamagnetic behavior, which render them easily affected by even low external magnetic field, in addition to their biocompatibility, low toxicity, and their ease of preparation at low cost. These peculiar features of the superparamagnetic iron oxide nanoparticles (SIONPs) make them good candidates for various in vitro (diagnostic) and in vivo (diagnostic or therapeutic) biomedical applications. Recently, there is great research attempts to use SIONPs in theranostic applications (i.e., for therapeutic and diagnostic purposes at the same time). However, in order to be conveniently used in bio-related applications, surface modification of SIONPs is of a paramount importance, which imparts several advantages, including the enhancement of biocompatibility and colloidal stability in aqueous and physiological media, provides mechanical and chemical stability for SIONPs and induces reactive chemical functions capable for immobilizing biological species via chemical interaction (e.g., enzymes, proteins, antibody, antigen, etc.), which is highly needed for biomedical applications. In this review article, a special attention is paid to SIONPs starting from the various synthetic approaches used for their preparation and encapsulation in a polymer matrix till their end use in various biomedical and pharmaceutical areas.