Central nervous system (CNS) disorders affect as many as 1.5 billion people globally. The limited delivery of most imaging and therapeutic agents into the brain is a major challenge for treatment of CNS disorders. With the advent of nanotechnologies, controlled delivery of drugs with nanoparticles holds great promise in CNS disorders for overcoming the blood-brain barrier (BBB) and improving delivery efficacy. In recent years, magnetic iron oxide nanoparticles (MIONPs) have stood out as a promising theranostic nanoplatform for brain imaging and drug delivery as they possess unique physical properties and biodegradable characteristics. In this review, we summarize the recent advances in MIONP-based platforms as imaging and drug delivery agents for brain diseases. We firstly introduce the methods of synthesis and surface functionalization of MIONPs with emphasis on the inclusion of biocompatible polymers that allow for the addition of tailored physicochemical properties. We then discuss the recent advances in in vivo imaging and drug delivery applications using MIONPs. Finally, we present a perspective on the remaining challenges and possible future directions for MIONP-based brain delivery systems.