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Recent advances in nanotechnology, materials science, and biotechnology have led to innovations in the field of nanomedicine. Improvements in the diagnosis and treatment of cancer are urgently needed, and it may now be possible to achieve marked improvements in both of these areas using nanomedicine. Lipid-coated nanoparticles containing diagnostic or therapeutic agents have been developed and studied for biomedical applications and provide a nanomedicine strategy with great potential. Lipid nanoparticles have cationic headgroups on their surfaces that bind anionic nucleic acids and contain hydrophobic drugs at the lipid membrane and hydrophilic drugs inside the hollow space in the interior. Moreover, researchers can design nanoparticles to work in combination with external stimuli such as magnetic field, light, and ionizing radiation, which adds further utility in biomedical applications. In this Account, we review several examples of lipid-based nanoparticles and describe their potential for cancer treatment and diagnosis. (1) The development of a lipid-based nanoparticle that included a promoter-enhancer and transcriptional activator greatly improved gene therapy. (2) The addition of a radiosensitive promoter to lipid nanoparticles was sufficient to confer radioisotope-activated expression of the genes delivered by the nanoparticles. (3) We successfully tailored lipid nanoparticle composition to increase gene transduction in scirrhous gastric cancer cells. (4) When lipophilic photosensitizing molecules were incorporated into lipid nanoparticles, those particles showed an increased photodynamic cytotoxic effect on the target cancer. (5) Coating an Fe(3)O(4) nanocrystal with lipids proved to be an efficient strategy for magnetically guided gene-silencing in tumor tissues. (6) An Fe(16)N(2)/lipid nanocomposite displayed effective magnetism and gene delivery in cancer cells. (7) Lipid-coated magnetic hollow capsules carried aqueous anticancer drugs and delivered them in response to a magnetic field. (8) Fluorescent lipid-coated and antibody-conjugated magnetic nanoparticles detected cancer-associated antigen in a microfluidic channel. We believe that the continuing development of lipid-based nanomedicine will lead to the sensitive minimally invasive treatment of cancer. Moreover, the fusion of different scientific fields is accelerating these developments, and we expect these interdisciplinary efforts to have considerable ripple effects on various fields of research.