In this study, magnetic polymeric nanoparticles were prepared use in for targeted drug delivery. First, iron oxide (Fe3O4) magnetic nanoparticles (MNPs) were synthesized by coprecipitation with ferrous and ferric chloride salts. Then, to render the MNPs hydrophobic, the surfaces were covered with oleic acid. Finally, the hydrophobic MNPs (H-MNPs) were encapsulated with polymer. The emulsion evaporation technique was used for the preparation of polymer-coated H-MNP. Poly(DL-lactide-co-glycolide) (PLGA) and chitosan-modified PLGA were used as polymers. The polymeric nanoparticles were characterized and compared. X-ray diffraction, Fourier transform infrared spectroscopy, scanning electron microscopy, transmission electron microscopy, small-angle X-ray scattering, size distribution, zeta potential, magnetic properties, and magnetite entrapment efficiency measurements were performed to investigate the properties of the nanoparticles. The XTT assay was performed to understand the biocompatibility (i.e., toxicity) of MNPs and magnetic polymeric nanoparticles to MCF-7 cells.