The promising potential of magnetic polymer microspheres in various biomedical applications has been frequently reported. However, the surface hydrophilicity of superparamagnetic iron oxide nanoparticles (SPIONs) usually leads to poor or even failed encapsulation of SPIONs in hydrophobic polymer microspheres using the emulsion method. In this study, the stability of SPIONs in poly(3-hydroxybutyrate-co-3-hydroxyvalerate) (PHBV) solution was significantly increased after surface modification with lauric acid. As a result, magnetic PHBV microspheres with high encapsulation efficiencies (71.0-87.4%) were prepared using emulsion-solvent extraction/evaporation method. Magnetic resonance imaging (MRI) showed significant contrast for the magnetic PHBV microspheres. The toxicity of these magnetic PHBV microspheres towards human T-lymphoma suspension cells and adherent colon carcinoma HT-29 cells was investigated using flow cytometry, and they were shown to be non-toxic in a broad concentration range. A model drug, tetracycline hydrochloride, was used to demonstrate the drug delivery capability and to investigate the drug release behavior of the magnetic PHBV microspheres. The drug was successfully loaded into the microspheres using lauric acid-coated SPIONs as drug carrier, and was released from the microspheres in a diffusion controlled manner. The developed magnetic PHBV microspheres are promising candidates for biomedical applications such as targeted drug delivery and MRI.