This study is about multifunctional magnetic nanoparticles surface-modified with bilayer oleic acid, and coated with a thermo-responsive copolymer poly(N-isopropylacrylamide-co-acrylamide) by emulsion polymerization, for controlled drug delivery and magnetic hyperthermia applications. Nanoparticles were loaded with anticancer drug doxorubicin into the copolymer chains at 25 degrees C. Composite nanoparticles (hydrated) of average diameter 45 nm were of core shell structure having magnetic core of about 18 nm and shell was composed of organic compounds and water. Magnetic core was super-paramagnetic lacking coercive force and remanance due to the pseudo-single domain nanostructure. Lower critical solution temperature (LCST) of the thermo-responsive copolymer was observed to be around 39 degrees C. Below this temperature, copolymer was hydrophilic, hydrated and swelled. But above LCST, copolymer became hydrophobic, dehydrated and shrank in volume. UV visible spectrophotometer was used to investigate the drug loading and releasing profile at different temperatures as well as under magnetic heating. There was almost absence of drug release at around 37 degrees C (normal body temperature). Drug was released at temperatures above LCST, which is significant for controlled drug delivery. Magnetic heat-generation was studied by exposing the magnetic fluid to alternating magnetic field of 7.2 kA m(-1) having frequency 70 kHz. A simple magnetic capturing system (simulating a blood vessel) was used to analyze the capturing of magnetic nanoparticles under various applied fields for drug targeting purpose. (C) 2012 Elsevier B.V. All rights reserved.