Designing of bio-compatible nanomagnets with multiple functionalities receives immense scientific attention due to their potential applications in bio-labeling, medical diagnosis and treatment. Here we report the synthesis of Nickel (Ni) incorporated single-walled carbon nanotube (SWCNT) hybrid and bio-compatible bundles having interesting magnetic and photoluminescence (PL) properties. The SWCNT exhibits a high-crystallinity and it has an average diameter of similar to 1.7 nm. Ni particles of 10-20 nm were incorporated within the SWCNT bundles. These hybrid bundles exhibit PL and it is attributed to the presence of delocalized pi electrons and their recombination at the defective sites of SWCNT. Magnetic characterization revealed that the SWCNT/Ni hybrid bundle possesses a high (50 Oe) coercivity compared to bulk Ni and a long range ferromagnetic ordering at room temperature. MU-assay has been conducted to study the cytotoxicity of these hybrid nanostructures. (C) 2011 Elsevier Inc. All rights reserved.