One of the key factors required in tissue engineering/regeneration is to create a dynamic platform to increase the interaction of cells in response to various stimuli. In this context, facile synthesis of modified polyethylene glycol (FL PEG) encapsulated Iron Oxide nanoparticles [PoeM (Fe) NPs] is reported for its wound healing application in presence of an external magnetic field. Iron Oxide nanoparticles (8 ± 2nm) are synthesized and coated with FL PEG resulting in the formation of PoeM (Fe) NPs. The synthesized nanoparticles are characterized for their UV-Vis absorbance, DLS and TEM. These PoeM (Fe) NPs show excellent biocompatibility and enhanced wound healing activity in L929 fibroblasts when compared with control groups. This study could pave the way for the development of novel biomimetic nanosystems for wound healing applications. © 2002-2012 IEEE.