Nontoxic to human γ-iron(III) oxide nanoparticles (γ-Fe₂O₃NPs) with ferrimagnetic and semiconductor properties, surface-functionalized with a peptide, can be useful as biosensors, drug-carriers, and therapeutic agents in MRI and hyperthermia. Surface-functionalized γ-Fe₂O₃NPs can protect tissue from damage caused by generation and attack of OH free radicals resulting from the exposure of Fe₂O₃ to visible light. Reducing the side effects of conventional therapy makes Fe₂O₃ a promising tool for the treatment of cancer. γ-Fe₂O₃NPs were synthesized in surfactant/ions-free aqueous solution on a new synthetic route, allowing control the size and morphology of the nanoparticles. γ-Fe₂O₃NPs were characterized by UV–vis, SEM-EDS, FTIR-ATR, Raman, XPS, XRD, Mössbauer, and DLS methods. It was shown that the aged nanoparticles were highly pure (γ-phase), well-crystallized, and had a spherical shape of an average diameter of 77 nm. γ-Fe₂O₃NPs were tested for their ability (i.) to adsorb Bombesin which occurs in the human body fluids and is known to induce tumor cell growth and (ii.) to promote the SERS effect. The SERS spectra on γ-Fe₂O₃ were compared to the SERS spectra on the α-Fe surface. The analysis was supported by SERS data for selected amino acids and BN immobilized on Cu, Au, Ag, Au@SiO₂, and Ti.