Abstract Carbon nanostructures containing ferromagnetic material could find different application such as drug delivery systems. In the current work, magnetic nanoparticles of Fe and Nd–Fe–B alloy encapsulated in carbon shells for drug delivery systems have been studied. HRTEM investigation shows that the product is composed of the crystalline material encapsulated in multi-walled carbon cage. The size of the particles is in the range of 10–100 nm. XEDS spectra indicate the presence of Fe and Fe–Nd crystals embedded in carbon cages. Magnetic measurements and MFM images show that nanoparticles exhibit ferromagnetic behavior. The encapsulates surface can be grafted by COOH groups after the acid treatment. Drug molecules and targeting ligands molecules can be covalently attached to the encapsulates via carboxyl groups. Carbon shell protects the magnetic nanocrystalline core against the oxidation, or biodegradation during exposition to the biological systems. The encapsulates can be injected into the blood vessels and targeted with the external magnetic field what is further discussed. The interaction between encapsulates and human living cells is studied as well.