A series of luminescent octahedral molybdenum cluster complexes were obtained by treating Na2[Mo6I8(OMe)6] with icosahedral closo-dicarbaborane C-carboxylic acids in refluxing tetrahydrofuran. The study of the photophysical properties of Na2[Mo6I8(1-OOC-1,2-closo-C2B10H11)6] (1), Na2[Mo6I8(1-OOC-1,7-closo-C2B10H11)6] (2), and Na2[Mo6I8(1-OOC-1,12-closo-C2B10H11)6] (3) in acetonitrile revealed a red luminescence with high quantum yields up to 0.93 for 2, an efficient quenching of the luminescence by oxygen, and high quantum yields of singlet oxygen formation of approximately 0.7. Self-assembly between compound 2 and β-cyclodextrin polymer led to monodisperse hydrogel particles with a diameter of approximately 200 nm and unchanged luminescence spectra and kinetics features over 14 days. In contrast, bare cluster complex 2 in water formed aggregates and hydrolyzed over the time as indicated by a progressive red shift of the luminescence maxima. The invariance of key photophysical parameters of the hydrogel particles coupled with a high oxygen sensitivity of the luminescence are attractive features for long-term biological experiments involving optical oxygen probing. In addition, this hydrogel is a singlet oxygen sensitizer in water with promising properties for photodynamic therapy.