Aminodextran (AMD) coated magnetic cobalt ferrite nanoparticles are synthesized via electrostatic adsorption of aminodextran onto magnetic nanoparticles and their potential theranostic application is evaluated. The uncoated and aminodextran-coated nanoparticles are characterized to determine their hydrodynamic size, morphology, chemical composition, zeta potential and magnetization. The aminodextran containing cobalt ferrite nanoparticles of nanometer size are positively charged in the pH range from 3 to 9 and exhibit saturation magnetization of 50 emu/g. The magnetic resonance imaging (MRI) indicates capability for diagnostics and a reduction in intensity with an increase in nanoparticle amount. The hyperthermia capability of the prepared particles shows their potential to generate suitable local heat for therapeutic purposes. There is a rise of 7 °C and 9 °C at 327 kHz and 981 kHz respectively and specific absorption rates (SAR) of aminodextran-coated nanoparticles are calculated to be 259 W/g and 518 W/g at the given frequencies larger than uncoated nanoparticles (0.02 W/g). The development of novel aminodextran coated magnetic cobalt ferrite nanoparticles has significant potential to enable and improve personalized therapy regimens, targeted cancer therapies and ultimately to overcome the prevalence of nonessential and overdosing of healthy tissues and organs.