Drug-loading on magnetic nanoparticles coated with biocompatible polymers are intriguing nanostructures for targeted delivery of anticancer drugs with the application of a magnetic field. In this paper, we report the preparation of SmFeO3 nanoparticles and loading of the anticancer drug 5-fluorouracil on the carrier by forming host-guest complex with -cyclodextrin. The material and the polymer are characterized using IR and EDX spectroscopic techniques. The nanocarrier formulation shows an enhanced loading and release of the drug. The size and the magnetic properties of the nanoparticles are suitable for cancer drug targeting, i.e., around 50nm, and the particles show a superparamagnetic behavior. In vitro cytotoxicity studies reveal that the loaded 5-fluorouracil retains its potency and the drug-loaded nanocarrier shows better anticancer activity.