In this study, fluorescence-encoded magnetic biocompatible nanoparticles (NPs) were constructed from CdSe@ZnS quantum dots (QDs) and Fe3O4 nanoparticles with a one-step reprecipitation-encapsulation method. The resultant hybrid NPs exhibit small size (∼130 nm in diameter), highly bright QDs, two-color emissions (green and red) under single-wavelength excitation, easy separation with a magnet and efficient cellular internalization. Energy transfer between the incorporated QDs was studied to better tailor the encoded fluorescence, and 11 barcodes were obtained by adjusting the ratio of green and red QDs. We used four sets of the barcodes to tag specific cancer cells (HepG2) as a proof-of-concept, and distinguished each set according to respective overlayed fluorescence images using laser confocal microscopy. Moreover, the incorporated Fe3O4 NPs endowed as-constructed optical barcode superparamagnetic property by T2-enhanced magnetic resonance effect with an r2 value of 145.25 s−1 mM−1 at 3 T. These results suggest that the multifunctional NPs are very promising for discriminating different cells and dual-modality imaging.