Functionalized Fe nanoparticles (NPs) have played an important role in biomedical applications. In this study, metallic Fe NPs were deposited on SiO2 spheres to form a Fe/SiO2 composite. To protect the Fe from oxidation, a thin SiO2 layer was coated on the Fe/SiO2 spheres thereafter. The size and morphology of the SiO2@Fe/SiO2 composite spheres were examined by transmission electron microscopy (TEM). The iron form and its content and magnetic properties were examined by X-ray diffraction (XRD), inductively-coupled plasma mass spectrometry (ICP-MS) and a superconducting quantum interference device (SQUID). The biocompatibility of the SiO2@Fe/SiO2 composite spheres was examined by Cell Counting Kit-8 (CCK-8) and lactate dehydrogenase (LDH) tests. The intracellular distribution of the SiO2@Fe/SiO2 composite spheres was observed using TEM. XRD analysis revealed the formation of metallic iron on the surface of the SiO2 spheres. According to the ICP-MS and SQUID results, using 0.375 M FeCl3·6H2O for Fe NPs synthesis resulted in the highest iron content and magnetization of the SiO2@Fe/SiO2 spheres. Using a dye loading experiment, a slow release of a fluorescence dye from SiO2@Fe/SiO2 composite spheres was confirmed. The SiO2@Fe/SiO2 composite spheres co-cultured with L929 cells exhibit biocompatibility at concentrations <16.25 µg/mL. The TEM images show that the SiO2@Fe/SiO2 composite spheres were uptaken into the cytoplasm and retained in the endosome. The above results demonstrate that the SiO2@Fe/SiO2 composite spheres could be used as a multi-functional agent, such as a magnetic resonance imaging (MRI) contrast agent or drug carriers in biomedical applications.