Conventional cancer chemotherapies cannot differentiate between healthy and cancer cells, and lead to severe side effects and systemic toxicity. Another major problem is the drug resistance development before or during the treatment. In the last decades, different kinds of controlled drug delivery systems have been developed to overcome these shortcomings. The studies aim targeted drug delivery to tumor site. Magnetic nanoparticles (MNP) are potentially important in cancer treatment since they can be targeted to tumor site by an externally applied magnetic field. In this study, MNPs were synthesized, covered with biocompatible polyethylene glycol (PEG) and conjugated with folic acid. Then, anti-cancer drug idarubicin was loaded onto the nanoparticles. Shape, size, crystal and chemical structures, and magnetic properties of synthesized nanoparticles were characterized. The characterization of synthesized nanoparticles was performed by dynamic light scattering (DLS), Fourier transform–infrared spectroscopy (FT–IR), transmission electron microscopy (TEM), scanning electron microscopy (SEM) analyses. Internalization and accumulation of MNPs in MCF-7 cells were illustrated by light and confocal microscopy. Empty MNPs did not have any toxicity in the concentration ranges of 0–500μg/mL on MCF-7 cells, while drug-loaded nanoparticles led to significant toxicity in a concentration-dependent manner. Besides, idarubicin-loaded MNPs exhibited higher toxicity compared to free idarubicin. The results are promising for improvement in cancer chemotherapy.