We report a new type of multifunctional nanomaterials, FePt@Fe2O3 yolk-shell nanoparticles, that exhibit high cytotoxicity originated from the FePt yolks and strong MR contrast enhancement resulting from the Fe2O3 shells. Encouraged by the recently observed high cytotoxicity of FePt@CoS2 yolk-shell nanoparticles, we used Fe2O3 to replace CoS2 as the shells to further explore the applications of the yolk-shell nanostructures. The ultralow IC50 value (238 +/- 9 ng of Pt/mL) of FePt@Fe2O3 yolk-shell nanoparticles likely originates from the fact that the slow oxidation and release of FePt yolks increases the cytotoxicity. Moreover, compared with two commercial magnetic resonance imaging (MRI) contrast agents, MION and Sinerem, the FePt@Fe2O3 yolk-shell nanoparticle showed stronger contrast enhancement according to their apparent transverse relaxivity values (r2* = 3.462 (microg/mL)(-1) s(-1)). The bifunctional FePt@Fe2O3 yolk-shell nanoparticles may serve both as an MRI contrast agent and as a potent anticancer drug. This work indicates that these unique yolk-shell nanoparticles may ultimately lead to new designs of multifunctional nanostructures for nanomedicine.