We report on the synthesis of bifunctional mitoxantrone (MTX)-grafted magnetic nanoparticles (MNPs) modified by dopamine-polyethylene glycol-folic acid (DPA-PEG-FA) for targeted imaging and therapy of cancer. MNPs (~7-10 nm) were synthesized using the thermal decomposition reaction of Fe(acac)3. Bromoacetyl (BrAc) terminal polyethylene glycol dopamine (DPA-PEG-BrAc) was synthesized and treated with ethylene diamine to form bifunctional PEG moiety containing dopamine at one end and amino group at the other end (i.e. DPA-PEG-NH2). It was then reacted with Fe3O4 nanoparticles (NPs) to form Fe3O4-DPA-PEG-NH2 NPs. The activated folic acid (FA) was chemically coupled to Fe3O4-DPA-PEG-NH2, forming Fe3O4-DPA-PEG-FA. MTX was then conjugated to Fe3O4-DPA-PEG-FA, forming Fe3O4-DPA-PEG-FA-MTX. Physicochemical characteristics of the engineered MNPs were determined. The particle size analysis and electron microscopy showed an average size of ~35 nm for Fe3O4-DPA-PEG-FA-MTX NPs with superparamagnetic behavior. FT-IR spectrophotometry analysis confirmed the conjugation of FA and MTX onto the MNPs. Fluorescence microscopy, cytotoxicity assay and flow cytometry analysis revealed that the engineered Fe3O4-DPA-PEG-FA-MTX NPs were able to specifically bind to and significantly inhibit the folate receptor (FR)-positive MCF-7 cells, but not the FR-negative A549 cells. Based upon these findings, we suggest the Fe3O4-DPA-PEG-FA-MTX NPs as an effective multifunctional-targeted nanomedicine toward simultaneous imaging and therapy of FR-positive cancers.