This paper describes a sol−gel approach for the coating of superparamagnetic iron oxide nanoparticles with uniform shells of amorphous silica. The coating process has been successfully applied to particles contained in a commercial ferrofluid (e.g., the EMG 304 of Ferrofluidics) and those synthesized through a wet chemical process. The thickness of silica coating could be conveniently controlled in the range of 2−100 nm by changing the concentration of the sol−gel solution. Fluorescent dyes, for example, 7-(dimethylamino)-4-methylcoumarin-3-isothiocyanate (DACITC) and tetramethylrhodamine-5-isothiocyanate (5-TRITC), have also been incorporated into the silica shells by covalently coupling these organic compounds with the sol−gel precursor. These multifunctional nanoparticles are potentially useful in a number of areas because they can be simultaneously manipulated with an externally applied magnetic field and characterized in situ using conventional fluorescence microscopy.