Recently the core-shell nanostructures are employed for various applications. In this trend, ϵ-Fe₃N@Fe₃O₄ (INIO) magnetic nanoparticles (core/shell structured) were synthesized by a solvothermal process followed by calcination. The X-ray diffraction (XRD), selected area diffraction pattern (SAEDP), X-ray photoelectric spectroscopy (XPS) and Mössbauer spectroscopy validates the formation of the spherical core-shell structure of the ϵ-Fe₃N@Fe₃O₄ nanoparticles having size range (5–32 nm). The saturation magnetization values for the sample at ±2 T field were around 128 and 99 Am²/kg at 5 and 300 K respectively. The values were higher than the known values for iron oxide nanoparticles. The pluronic acid (F-127) based ferrofluid of these nanoparticles, displayed excellent stability (Zeta potential values) and good heating ability (external AC magnetic fields). The best specific loss power was found to be around 90 W/g at 23 mT field. The cell viability with human lung adenocarcinoma A549 cells was observed to be 88 and 85% at 1 mg/mL for these nanoparticles after the treatment for 24 and 48 h respectively.