Poly-N-isopropylacrylamide (PNIPAM), a biocompatible and thermosensitive polymer, exhibits reversible volume phase transition from a hydrophilic coil to hydrophobic globule at the lower critical solution temperature (LCST) of 305 K in an aqueous solution. To produce this conformational change solely by magnetic heating we incorporated magnetite nanoparticles (∼12 nm diameter) in the polymer. These PNIPAM/magnetite nanoparticle composites showed substantial heating when exposed to an alternating magnetic field. We report the non-invasive in vitro controlled release of anti-cancer drug mitoxantrone, which was loaded into the composite, driven solely by the heating induced by the external magnetic field. We found that the temperature of the composite reached 323 K in 4 min by magnetic heating, releasing 4% of the drug in this time, at an average effective release rate of 0.010 mg min−1 (corresponding to 1% per minute). We also present results on thermodynamic and magnetic anomalies near the LCST of the PNIPAM–Fe3O4 composite.