Due to their particular magnetic properties, nanoparticles of metallic iron are promising candidates for magnetic fluid hyperthermia when compared to the commonly used iron oxides. However, the difficulty of handling these structures in ambient conditions without oxidation hinders its practical application. In this work, iron filled carbon nanotubes non-covalently functionalized by human serum albumin are studied as potential agents for hyperthermia. Here the iron is encapsulated inside of the carbon shells and protected from reactions with its environment. Besides protecting the iron and biological environment against each other, the carbon shells can also work as an interface for conjugation with other biological molecules of interest. In order to assess if such structures could induce any toxic effect in human cell cultures, we have probed its biocompatibility on a dosage and time dependent manner by measuring metabolic activity, cell proliferation, cell cycle distribution and apoptosis. Our results have shown that those nanotubes strongly associate with cells within a short incubation period and do not pose any significant toxic effect. The magnetic properties of iron filled carbon nanotubes in biological environment, i.e., associated to cells, have been studied and a possible rotation as a function of the applied magnetic field is discussed. Our initial findings encourage the further study of these structures as potential hyperthermia agents.