We developed a novel magnetometer that employs negatively charged nitrogen-vacancy (NV−) centers in diamond, to detect the magnetic field generated by magnetic nanoparticles (MNPs) for biomedical applications. The compact probe system is integrated into a fiber-optics platform allowing for a compact design. To detect signals from the MNPs effectively, we demonstrated, for the first time, the application of an alternating current (AC) magnetic field generated by the excitation coil of several hundred microteslas for the magnetization of MNPs in diamond quantum sensing. In the lock-in detection system, the minimum detectable AC magnetic field (at a frequency of 1.025 kHz) was approximately 57.6 nT for one second measurement time. We were able to detect the micromolar concentration of MNPs at distances of a few millimeters. These results indicate that the magnetometer with the NV− centers can detect the tiny amounts of MNPs, thereby offering potential for future biomedical applications.