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Magnetic nanoparticles and especially superparamagnetic iron oxide nanoparticles (SPIONs) have found innumerable applications in bioscience and biotechnology. Accommodation of active molecules and forming homogeneous dispersion in solution, combined with easy capture by external magnetic fields has made them favorable candidates for molecular scale applications such as sensing and detection, imaging, targeted delivery, toxin decorporation, catalysis and pathogen removal. This review summarizes the recent advances and challenges in the above-mentioned applications.