Iron oxide magnetic nanoparticles (MNPs) alone are suitable for a broad spectrum of applications, but the low stability and heterogeneous size distribution in aqueous medium represent major setbacks. These setbacks can however be reduced or diminished through the coating of MNPs with various polymers, especially biopolymers such as polysaccharides. Polysaccharides are biocompatible, non-toxic and renewable; in addition, they possess chemical groups that permit further functionalization of the MNPs. Multifunctional entities can be created through decoration with specific molecules e.g. proteins, peptides, drugs, antibodies, biomimetic ligands, transfection agents, cells, and other ligands. This development opens a whole range of applications for iron oxide nanoparticles. In this review the properties of magnetic structures composed of MNPs and several polysaccharides (Agarose, Alginate, Carrageenan, Chitosan, Dextran, Heparin, Gum Arabic, Pullulan and Starch) will be discussed, in view of their recent and future biomedical and biotechnological applications.