Magnetic iron oxide nanoparticles(IONPs) are heavily explored as diagnostic and therapeutic agents due to their low cost, tunable properties, and biocompatibility. In particular, upon excitation with an alternating current(AC) magnetic field, the NPs generate localized heat that can be exploited for therapeutic hyperthermia treatment of diseased cells or pathogenic microbes. In this review, we focus on how structural changes and inter-particle interactions affect the heating efficiency of iron oxide-based magnetic NPs. Moreover, we present an overview of the different approaches to evaluate the heating performance of IONPs and introduce a new theranostic modality based on magnetic imaging guided–hyperthermia. Magnetic iron oxide nanoparticles (IONPs) are heavily explored as diagnostic and therapeutic agents due to their low cost, tunable properties, and biocompatibility. In particular, upon excitation with an alternating current (AC) magnetic field, the NPs generate localized heat that can be exploited for therapeutic hyperthermia treatment of diseased cells or pathogenic microbes. In this review, we focus on how structural changes and inter-particle interactions affect the heating efficiency of iron oxide-based magnetic NPs. Moreover, we present an overview of the different approaches to evaluate the heating performance of IONPs and introduce a new theranostic modality based on magnetic imaging guided-hyperthermia.