The aim of the present investigation is the development, optimization and characterization of curcumin-loaded hybrid nanoparticles of vanillin-chitosan coated with super paramagnetic calcium ferrite. The functionally modified vanillin-chitosan was prepared by the Schiff base reaction to enhance the hydrophobic drug encapsulation efficiency. Calcium ferrite (CFNP) nano particles were added to the vanillin modified chitosan to improve the biocompatibility. The vanillin-chitosan-CFNP, hybrid nanoparticle carrier was obtained by ionic gelation method. Characterizations of the hybrid materials were performed by XRD, FTIR, 1H NMR, TGA, AFM and SEM techniques to ensure the modifications on the chitosan material. Taguchi method was applied to optimize the drug (curcumin) encapsulation efficiency by varying the drug to chitosan-vanillin, CFNP to chitosan-vanillin and TPP (sodium tripolyphospate) to chitosan-vanillin ratios. The maximum encapsulation efficiency was obtained as 98.3% under the conditions of 0.1, 0.75 and 1.0 for the drug to chitosan-vanillin, CFNP to chitosan-vanillin and TPP to chitosan-vanillin ratios, respectively. The curcumin release was performed at various pH, initial drug loading concentrations and magnetic fields. The drug release mechanism was predicted by fitting the experimental kinetic data with various drug release models. The drug release profiles showed the best fit with Higuchi model under the most of conditions. The drug release mechanism followed both non-Fickian diffusion and case II transport mechanism for chitosan, however the non-Fickian diffusion mechanism was followed for the vanillin modified chitosan. The biocompatibility of the hybrid material was tested using L929 fibroblast cells. The cytotoxicity test was performed against MCF-7 breast cancer cell line to check the anticancer property of the hybrid nano carrier with the curcumin drug.