This dissertation describes the effect that the controlled incorporation of manganese (Mn) has on the optical and magnetic properties of colloidal PbS nanoparticles.] Optical and temperature-dependent optical studies combined with structural and chemical characterisation indicate the formation of alloyed (PbMn)S nanoparticles with Mn-content up to approximately 8 %. The nanoparticle photoluminescence (PL) properties are strongly dependent on the Mn-content and the PL emission can be tuned by the Mn-content in the near-infrared (NIR) wavelength range (850-1200 nm). Magnetisation and electron paramagnetic resonance (EPR) measurements show that the incorporation of manganese imprints PbS nanoparticles with paramagnetic properties. A study of a number of photoinduced phenomena is also presented. It is found that the continuous exposure of the nanoparticles to laser light leads to a blue-shift of the PL emission energy and an enhancement of the PL intensity. Raman spectroscopy is also used to further investigate these phenomena, which are attributed to a photo-oxidation of the nanoparticles surface. The solubility of (PbMn)S nanoparticles and their duel functionality, i.e. NIR luminescence and paramagnetism, could open up exciting prospects for the future exploitation of these nanocrystals as imaging labels for combined flouorescence and magnetic resonance imaging (MRI).