Magnetic nanoparticles (MNPs) have great potential in the life sciences, as well as in therapeutic and diagnostic devices in the growing field of personalized medicine. Particularly, MNPs have the capability of converting electromagnetic energy into thermal energy when subjected to alternating magnetic fields. A wealth of research has been devoted to the utilization of heat generated by MNPs for cancer treatment. Here, we will focus on the design and synthesis of MNPs and their application in magnetic hyperthermia. Synthetic strategies for MNPs that control their particle size, distribution, shape, morphology, and chemical composition will be discussed. Furthermore, surface coating and functionalization techniques, which bestow biocompatibility on MNPs will be presented as well as recent clinical applications of magnetic hyperthermia.