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Nanomaterials have demonstrated a wide range of applications and recently, novel biomedical studies are devoted to improving the functionality and effectivity of traditional and unmodified systems, either drug carriers and common scaffolds for tissue engineering or advanced hydrogels for wound healing purposes. In this regard, metal oxide nanoparticles show great potential as versatile tools in biomedical science. In particular, iron oxide nanoparticles with different shape and sizes hold outstanding physiochemical characteristics, such as high specific area and porous structure that make them idoneous nanomaterials to be used in diverse aspects of medicine and biological systems. Moreover, due to the high thermal stability and mechanical strength of Fe2O3, they have been combined with several polymers and employed for various nano-treatments for specific human diseases. This review is focused on summarizing the applications of Fe2O3-based nanocomposites in the biomedical field, including nanocarriers for drug delivery, tissue engineering, and wound healing. Additionally, their structure, magnetic properties, biocompatibility, and toxicity will be discussed.