Magnetic nanoparticles are envisaged to overcome the impediments in the methods of targeted drug delivery and hence cure cancer effectively. We report herein, manganese ferrite nanoparticles, coated with β-cyclodextrin-modified polyethylene glycol as a carrier for the drug, camptothecin. The particles are of the size of ~ 100 nm and they show superparamagnetic behaviour. The saturation magnetization does not get diminished on polymer coverage of the nanoparticles. The β-cyclodextrin–polyethylene glycol conjugates are characterized using NMR and mass spectrometric techniques. By coating the magnetic nanoparticles with the cyclodextrin–tethered polymer, the drug-loading capacity is enhanced and the observed release of the drug is slow and sustained. The cell viability of HEK293 and HCT15 cells is evaluated and the cytotoxicity is enhanced when the drug is loaded in the polymer-coated magnetic nanoparticles. The noncovalent-binding based and enhanced drug loading on the nanoparticles and the sustained release make the nanocarrier a promising agent for carrying the payload to the target.