The objective of the study was to demonstrate that the addition of tumor-targeting ligands to the polymer-coated multifunctional superparamagnetic Fe₃O₄ nanoparticle surfaces changed the state of the dispersion in favor of stability. The negatively charged targeting ligands on the surfaces of Fe₃O₄ nanoparticles resulted in repulsive interparticle forces. Hence, the incorporation of tumor-targeting ligands can demonstrate a dispersive or stabilizing effect on Fe₃O₄ nanoparticles produced as ligand targeted drug delivery vehicles. Primarily, Fe₃O₄ nanoparticles were coated with biopolymers to reduce their toxicity and convert the surfaces to drug-adsorbable surfaces. Fe₃O₄ nanoparticles were coated with two different kinds of non-ionic polymers polyvinyl alcohol or polyvinylpyrrolidone to compare the different surfaces and their interactions with different targeting ligands. Folic acid (FA) and β-estradiol were chosen as tumor-targeting ligands which are known to be expressed highly in a variety of cancer cells. The impact of incorporating different targeting ligands onto the final core–shell structure of the Fe₃O₄ nanoparticles was investigated and compared in terms of the colloidal stability, cytotoxicity, drug adsorption and release, and antitumor activity. Incorporation of targeting ligands into drug delivery particles had no significant toxicity to normal cells (without the corresponding receptors) compared to Fe₃O₄ nanoparticles without targeting ligands. Furthermore, at appropriate concentrations, FA addition seems to promote cell proliferation. Targeting ligands were able to enhance drug uptake and cytotoxicity and perform similarly to pure drug treatments at most concentrations.