Mg1–xCuxFe2O4 (x = 0, 0.1) nanoparticle was successfully synthesized by the sol-gel method. Synthesized Mg0.9Cu0.1Fe2O4 nanoparticle was coated with the soluble starch and then conjugated with the antifungal drug ketoconazole. The detailed microstructural and structural characterizations of the nanoparticles and drug-loaded nanosystem were carried out by analyzing FTIR, EDS patterns and XRD data employing Rietveld refinement. The average particle sizes of different samples were determined from SEM and TEM image analysis. The antifungal activities of Mg0.9Cu0.1Fe2O4 nanoparticles (NP) and drug-conjugated nanoparticles (NP-DC) were revealed by agar cup assay and minimum inhibitory concentration (MIC) study against Candida Sp. A significant zone of fungal inhibition was obtained in the NP sample, and the antifungal efficacy indicated that it can be a promising antifungal agent without any external drug. The zone of inhibition due to the NP-DC sample was larger than that of the pure drug ketoconazole. It revealed the significant enhancement of the efficacy of ketoconazole after its conjugation with the NP sample, which was confirmed by the MIC study. In the MIC study, it has been revealed that the NP-DC sample has a similar activity as 100wt % ketoconazole. But in the NP-DC sample, only 40 wt % ketoconazole was present. It confirms the significantly enhanced activity of pure drug after its conjugation with the NP sample. The NP-DC sample has also significant inhibitory activity against the growth of lung carcinoma cells (A549 cells) while it has no any significant toxic effect on the normal human WI38 cells (lung fibroblast cells) as indicated by MTT assay. The anti-cancer activity of the NP-DC sample is significantly higher than that of the pure drug ketoconazole. The ability of NP-DC to produce cellular ROS and induction of apoptosis has been confirmed to be the cause of the enhanced cytotoxic effect of the NP-DC sample against lung carcinoma cells. This significant enhancement of antifungal and anticancer efficacy indicates the formation of a new nanomedicine with a significant antifungal activity that can also inhibit the growth of human carcinoma cells with higher efficacy. Due to enhanced efficacy, a small amount of ketoconazole conjugated with NPs would be required for the treatment, which in turn, reduces the side effects of the drug and becomes more affordable to the patients. This new nanomedicine can also be used as a potential drug for cancer treatment.