Tumor-targeted core-shell nanoparticles were developed for a multifunctional drug delivery system (DDS) for cancer therapy. Fe3O4 nanoparticles with mesoporous silica (Fe3O4NPs@mSiO2), in which Fe3O4 and mSiO2 form the core and shell, respectively, were functionalized to deliver a hydrophobic anti-tumor drug and to heat targeted tumor cells with the energy of an alternating magnetic field. For targeting tumor cells, tLyP-1, a tumor cell homing and penetrating peptide, was engrafted on to the Fe3O4NPs@mSiO2 (Fe3O4NPs@mSiO2-tLyP-1). The fabricated Fe3O4NPs@mSiO2-tLyP-1 were loaded with camptothecin (CPT); they showed robust, selective targeting and penetrating efficacy for Hela cells, and induced cell death. The CPT-loaded Fe3O4NPs@mSiO2-tLyP-1 (Fe3O4NPs@mSiO2-tLyP-1(CPT)) reduced the cell viability of Hela cells to 28.8%. Furthermore, in combination with application of an alternating magnetic field to cause hyperthermia, the nanoparticles made it possible to decrease viability to 18.3%. The systemic toxicity of Fe3O4NPs@mSiO2-tLyP-1(CPT) to human mesenchymal stem cells (hMSCs) was minimal, because the nanoparticles selectively targeted and penetrated the tumor cells. This study indicates that the developed Fe3O4NPs@mSiO2-tLyP-1 have potential as a DDS in the chemo-hyperthermic treatment of cancer.