The use of nanotechnology for the treatment of cancer affords the possibility of highly specific tumor targeting and improved treatment efficacy. Iron oxide magnetic nanoparticles (IONPs) have demonstrated success as an ablative mono-therapy and targetable adjuvant therapy. However, the relative therapeutic value of intracellular vs. extracellular IONPs remains unclear. Our research demonstrates that both extracellular and intracellular IONPs generate cytotoxicity when excited by an alternating magnetic field (AMF). While killing individual cells via intracellular IONP heating is an attractive goal, theoretical models and experimental results suggest that this may not be possible due to limitations of cell volume, applied AMF, IONP concentration and specific absorption rate (SAR). The goal of this study was to examine the importance of tumor size (cell number) with respect to IONP concentration. Mouse mammary adenocarcinoma cells were incubated with IONPs, washed, spun into different pellet sizes (0.1, 0.5 and 2 million cells) and exposed to AMF. The level of heating and associated cytotoxicity depended primarily on the number of IONPs /amount Fe per cell pellet volume and the relative volume of the cell pellet. Specifically, larger cell pellets achieved greater relative cytotoxicity due to greater iron amounts, close association and subsequently higher temperatures.