Developing new nanocarriers and understanding the interactions between the drug and host molecules in the nanocarrier at the molecular level is of importance for future of nanomedicine. In this work, we synthesized and characterized a series of iron oxide nanoparticles (IONPs) functionalized with different organic molecules (citric acid, α-cyclodextrin, and citric acid/α-cyclodextrin composite). It was found that incorporation of citric acid into the α-cyclodextrin had negligible effect on the adsorption efficiency (<5%) of citric acid/α-cyclodextrin functionalized IONPs, while the isotherm adsorption data were well described by the Langmuir isotherm model (qmax = 2.92 mg/g at T = 25 °C and pH = 7). In addition, the developed nanocarrier showed pH-responsive behavior for releasing the quercetin molecules as drug model, where the Korsmeyer-Peppas model could describe the release profile with Fickian diffusion (n < 0.45 for at all pH and temperatures). Then, Density functional theory was applied to calculate the absolute binding energies (ΔEb) of the complexation of quercetin with different host molecules in the developed nanocarriers. The calculated energies are as follow: 1) quercetin and citric acid: ΔEb = −16.58 kcal/mol, 2) quercetin and α-cyclodextrin: ΔEb = −46.98 kcal/mol, and 3) quercetin and citric acid/α-cyclodextrin composite: ΔEb = −40.15 kcal/mol. It was found that quercetin tends to interact with all hosts via formation of hydrogen bonds and van der Waals interactions. Finally, the cytotoxicity of the as-developed nanocarriers was evaluated using MTT assay and both normal NIH-3T3 and cancereous HeLa cells. The cell viability results showed that the quercetin could be delivered effectively to the HeLa cells due to the acidic environment inside the cells with minimum effect on the viability of NIH-3T3 cells. These results might open a new window to design of stimuli-responsive nanocarriers for drug delivery applications.