Although various iron-based magnetic materials have been extensively studied in biomedical field for many years, iron boride compounds with interesting chemical and magnetic properties are relatively less explored, and their potential applications are not as widely known. In this study, the synthesis, coating, surface modification, and cytotoxicity tests of the Fe–Zn–B system were presented. Iron boride-based nanoparticles (NPs) containing elemental zinc (Zn) were developed by using a direct chemical synthesis of FeCl3, ZnCl2 and NaBH4, and investigated for potential use in biomedical applications. Powders having the phases of pure FeB with small amount of elemental Zn were obtained with a uniform morphology and an average particle size of 68 nm. The NPs were then coated with oleic acid (OA) and surface modified with sodium tricitrate, to increase their stability and biocompatibility, and well-dispersed NPs were obtained with sizes below 30 nm. TEM investigations revealed the presence of hybrid clusters with nanoparticle – OA structures, indicating that FeB nanoparticles were stabilized by being embedded in OA clusters, forming both agglomerated sub-micron and free nano-sized structures. Obtained NPs showed ferromagnetic property, with a saturation magnetization of 25.9 emu/g and a low coercivity of 90 Oe. As a result of testing different types of healthy and cancer cell lines with NPs, Zn-doped-FeB@OA NPs exhibited a high biocompatibility. Results suggested that highly biocompatible and magnetic OA-coated Zn-doped FeB particles can be potential candidates for biomedical applications such as medical imaging or drug delivery systems.