Iron-based nanomaterial is made of nano-sized iron, iron oxide and ferroalloy by nature product or artificial synthesis. According to different structure composition, iron-based pharmaceutical nanomaterial can be classified into super paramagnetic iron oxide nanoparticles, magnetic iron oxide microspheres, magnetoferritin, magnetic iron oxide liposome, ferroalloy nanoparticle and etc. Iron-based nanomaterial has remarkable size effect, surface effect and quantum effect, especially unique magnetic properties, which makes it be widely used in magnetic resonance imaging, bioseparation in vitro, magnetic hyperthermia and drug delivery. Moreover, quite a few products have been approved in market or under clinical trials. Ideal iron-based nanomedicine should own important characteristic including definite structure, stable physical properties, uniform distribution, scalable production, safety and effectiveness in vivo. The drawbacks that confine medicinal application of iron-based nanomaterial depend on oxidative stress induced by iron ion and toxicity by iron overload in body. This article review research status of iron-based medicinal nanomaterial and the facing opportunities and challenges, finally give a prospects for the development.