The conversion of electromagnetic energy into heat by nanoparticles has the potential to be a powerful, non-invasive technique for biotechnology applications such as drug release, disease treatment and remote control of single cell functions, but poor conversion efficiencies have hindered practical applications so far. In this Letter, we demonstrate a significant increase in the efficiency of magnetic thermal induction by nanoparticles. We take advantage of the exchange coupling between a magnetically hard core and magnetically soft shell to tune the magnetic properties of the nanoparticle and maximize the specific loss power, which is a gauge of the conversion efficiency. The optimized core–shell magnetic nanoparticles have specific loss power values that are an order of magnitude larger than conventional iron-oxide nanoparticles. We also perform an antitumour study in mice, and find that the therapeutic efficacy of these nanoparticles is superior to that of a common anticancer drug.