A composite magnetic nanoparticle drug delivery system provides targeted controlled release chemotherapies for cancerous tumors and inflammatory diseases. The magnetic nanoparticle includes a biocompatible and biodegradable polymer, a magnetic nanoparticle, the biological targeting agent human serum albumin, and a therapeutic pharmaceutical composition. The composite nanoparticles are prepared by oil-in-oil emulsion/solvent evaporation and high shear mixing. An externally applied magnetic field draws the magnetic nanoparticles to affected areas. The biological targeting agent draws the nanoparticles into the affected tissues. Polymer degradation provides controlled time release delivery of the pharmaceutical agent.