Magnetic iron oxide nanoparticles (MNPs) have been developed for magnetic fluid hyperthermia (MFH) cancer therapy, where cancer cells are treated through the heat generated by application of a high frequency magnetic field. This heat has also been proposed as a mechanism to trigger release of chemotherapy agents. In each of these cases, MNPs with optimal heating performance can be used to maximize therapeutic effect while minimizing the required dosage of MNPs. In this study, the heating efficiencies (or specific absorption rate, SAR) of two types of MNPs were evaluated experimentally and then predicted from their magnetic properties. MNPs were also incorporated in the core of poly(ethylene glycol-b-caprolactone) micelles, co-localized with rhodamine B fluorescent dye attached to polycaprolactone to monitor local, nanoscale temperatures during magnetic heating. Despite a relatively high SAR produced by these MNPs, no significant temperature rise beyond that observed in the bulk solution was measured by fluorescence in the core of the magnetic micelles. MNPs were also incorporated into a macro-scale agarose gel system that mimicked a tumor targeted by MNPs and surrounded by healthy tissues. The agarose-based tumor models showed that targeted MNPs can reach hyperthermia temperatures inside a tumor with a sufficient MNP concentration, while causing minimal temperature rise in the healthy tissue surrounding the tumor. Display omitted •Evaluated the use of magnetic iron oxide nanoparticles for cancer hyperthermia•Determined power generation in nanoparticles experimentally and theoretically•Elucidated local temperature in core of polymeric micelles during hyperthermia•Evaluated bulk temperature rise in cm sized tumors during magnetic hyperthermia•Compared the rise in bulk solution temperature to local nanoparticle temperature