The field of neuromodulation is developing rapidly. Current techniques, however, are still limited as they i) either depend on permanent implants, ii) require invasive procedures, iii) are not cell-type specific, iv) involve slow pharmacokinetics or v) have a restricted penetration depth making it difficult to stimulate regions deep within the brain. Refinements into the different fields of neuromodulation are thus needed. In this review, we will provide background information on the different techniques of neuromodulation discussing their latest refinements and future potentials including the implementation of nanoparticles (NPs). In particular we will highlight the usage of magnetic nanoparticles (MNPs) as transducers in advanced neuromodulation. When exposed to an alternating magnetic field (AMF), certain MNPs can generate heat through hysteresis. This MNP heating has been promising in the field of cancer therapy and has recently been introduced as a method for remote and wireless neuromodulation. This indicates that MNPs may aid in the exploration of brain functions via neuromodulation and may eventually be applied for treatment of neuropsychiatric disorders. We will address the materials chemistry of MNPs, their biomedical applications, their delivery into the brain, their mechanisms of stimulation with emphasis on MNP heating and their remote control in living tissue. The final section compares and discusses the parameters used for MNP heating in brain cancer treatment and neuromodulation. Concluding, using MNPs for nanomaterial-mediated neuromodulation seem promising in a variety of techniques and could be applied for different neuropsychiatric disorders when more extensively investigated.