Iron oxide-gold nanoparticles that exhibit both magnetic and plasmonic behaviors have great potential for biomedical applications. The ability to remotely control the spatial position of a nanoparticle in real time while tracking its motion provides an exciting new tool for nanoscale sensing. In this review we summarize the major efforts in the design and synthesis of iron oxide-gold nanoparticles. The underlying magnetophoretic and plasmonic characteristics of gold and iron oxide nanoparticles that enable their use for biomedical applications are described. We discuss the challenges associated with the integration of iron oxide and gold in one unified nanostructure, including the chemical techniques involved in making such composite material. We emphasize on the importance of colloidal stability, and explain how this property determines the functionality of iron oxide-gold nanoparticles in physiological environment. Afterwards, we examine both the magnetophoresis and localized surface plasmon resonance of iron oxide-core gold-shell structure and provide theoretical explanations for these properties. Finally we suggest potential opportunities for use of iron oxide-gold nanoparticles. (C) 2013 Elsevier Ltd. All rights reserved.