A nanotheranostic system was developed using α-lactalbumin along with Fe3O4 nanoparticles as an magnetic resonance imaging (MRI) contrast agent for medical imaging and doxorubicin as the therapeutic agent. α-lactalbumin was precipitated and cross-linked using poly(ethylene glycol) and glutaraldehyde. Besides, polyethylenimine was applied to increase the number of amine groups during cross-linking between α-lactalbumin and Fe3O4 nanoparticles. Interestingly, 90% of the initial protein used for the coaggregation process was incorporated in the prepared 130 nm nanocomposites, which facilitated the 85% doxorubicin loading. Formation of pH-sensitive imine bonds between glutaraldehyde and amine groups on α-lactalbumin and polyethylenimine resulted in higher release of doxorubicin at acidic pHs and consequently development of a pH-sensitive nanocarrier. The designed nanocomposite was less immunogenic owing to stimulating the production of less amounts of C3a, C5a, platelet factor 4, glycoprotein IIb/IIIa, platelet-derived β-thromboglobulin, interleukin-6, and interleukin-1β compared to the free doxorubicin. Furthermore, 1000 μg/mL nanocomposite led to 0.2% hemolytic activity, much less than the 5% standard limit. The void nanocarrier induced no significant level of cytotoxicity in breast cancer and normal cells following 96 h incubation. The doxorubicin-loaded nanocomposite presented higher cytotoxicity, apoptosis induction, and doxorubicin uptake in cancer cells than free doxorubicin. Conversely, lower cytotoxicity, apoptosis induction, and doxorubicin uptake were observed in normal cells treated with the doxorubicin-loaded nanocarrier compared to free doxorubicin. In line with the results of in vitro experiments, in vivo studies on tumor-bearing mice showed more suppression of tumor growth by the doxorubicin-loaded nanocomposite compared to the free drug. Moreover, the pharmacokinetic study revealed slow release of doxorubicin from the nanocomposite. Besides, in vitro and in vivo MRI studies presented a higher r2/r1 ratio and comparable contrast to the commercially available DOTAREM, respectively. Our findings suggest that this new nanocomposite is a promising nanotheranostic system with promising potential for cancer therapy and diagnosis.