A new class of highly fluorescent, photostable, and magnetic core/shell nanoparticles in the submicrometer size range has been synthesized from a modified Stober method combined with the layer-by-layer (LbL) assembly technique. Luminescent magnetic nanoparticles are prepared via two main steps. The first step involves controlled addition of tetraethoxysilane to a dispersion of Fe3O4/gamma-Fe2O3 nanoparticles, which are thereby homogeneously incorporated as cores into monodisperse silica spheres. The second step involves the LbL assembly of polyelectrolytes and luminescent CdTe quantum dots onto the surfaces of the silica-coated magnetite/maghemite particles, which are finally covered with an outer shell of silica. These spherical particles have a typical diameter of 220 +/- 10 nm and a saturation magnetization of 1.34 emu g(-1) at room temperature, and exhibit strong excitonic photoluminescence. Nanoparticles with such a core/shell architecture have the added benefit of providing a robust platform (the outer silica shell) for incorporating diverse functionalities into a single nanoparticle.