Among the different types of nanoparticles (NPs), iron oxide magnetic nanoparticles (IOMNPs) and bimetallic gold-magnetic iron oxide NPs (Au-IOMNPs) are gaining impetus for biomedical applications. Due to their unique properties such as super-paramagnetic behaviour, biocompatibility, and ease of surface modification, IOMNPs become suitable for drug delivery and hyperthermia applications. In this study, iron tolerant bacterium Bacillus badius was used in the optimized biogenic synthesis of gold NPs (AuNPs), IOMNPs, and bimetallic Au-IOMNPs and functionalized with doxorubicin (Dox). When analyzed by MTT assay, Dox functionalized Au-IOMNPs showed cytotoxicity against MCF7 cells line with an IC50 value of 147 μg/mL. Noteworthy, IOMNPs were found suitable for hyperthermia treatment as the temperature rise was up to 48 °C under an applied current of 400 Oe. Thus, this study demonstrated the application of Bacillus badius mediated IOMNPs and Au-IOMNPs for Dox delivery and hyperthermia treatment.