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We present a new strategy for the fabrication of magneto-fluorescent nanoparticles designed for bimodal imaging. These hybrid nanostructures comprise an optically active semiconductor nanoparticle quantum dot core with tunable fluorescence, encapsulated within a hollow paramagnetic iron oxide shell that serves as an MRI contrast agent. The yolk-shell morphology enables incorporation of the semiconductor and magnetic domains into a single structure, while avoiding direct contact between them, which typically results in quenching of the desired optical fluorescence. We successfully demonstrate utilization of the ultrasmall (15 nm hydrodynamic size) magneto-fluorescent CdSe@CdS@Hollow-Fe2O3 nanoparticles for multimodal imaging of cells at the intracellular level. [ABSTRACT FROM AUTHOR]