Abstract: PEG-modified magnetic Fe₃O₄ (Fe₃O₄-PEG) nanoparticles were sythesized using a solvothermal reaction and characterized with transmission electron microscopy (TEM) and thermo gravimetric analysis (TGA). The photothermal effect and photothermal destruction of cancer cells were evaluated. Then the doxorubicin loaded Fe₃O₄-PEG (DOX-Fe₃O₄-PEG) nanoparticles were prepared. The cytotoxicity and combined chemotherapy/photothermal therapy (PTT) effect were investigated. Uniform PEG coated Fe₃O₄ nanoparticles with particle size of 155 nm were obtained in the experiment. The loading and release of doxorubicin on Fe₃O₄-PEG were pH-dependent. The drug loading capacity in water was 21%. The results of MTT indicated a good biocompatiblity of Fe₃O₄-PEG nanoparticles and high cytotoxicity of DOX-Fe₃O₄-PEG. In combined therapy experiment, photothermal therapy demonstrated unambiguously enhanced chemotherapy efficacy. In conclusion, the obtained Fe₃O₄-PEG nanoparticles which exhibit good photothermal effect and drug loading capacity can be used for chemotherapy and photothermal therapy. The synergetic anti-tumor activity indicates the potential for the combined application of chemotherapy and photothermal therapy in cancer treatment.