Theranostic nanoparticles have gained significant attention in cancer diagnosis and therapy. In this study, estrone (ES) and folic acid (FA) functionalized single and dual receptor targeted theranostic chitosan nanoparticles were developed for breast cancer imaging and therapy. These nanoparticles (NPs) were loaded with palbociclib (PB) and ultra-small magnesium nanoclusters (UMN). The developed nontargeted theranostic NPs (PB-UMN-CS-NPs), estrogen receptor targeted theranostic NPs (PB-UMN-CS-ES-NPs), folate receptor targeted theranostic NPs (PB-UMN-CS-FA-NPs), and dual targeted theranostic NPs (PB-UMN-CS-ES-FA-NPs) have particle sizes of 178.4 ± 1.21 nm, 181.6± 1.35 nm, 185.1± 1.33 nm, and 198.2± 1.43 nm with surface charges of +19.02± 0.382 mV, +13.89±0.410 mV, +16.72±0.527 mV and +15.23±0.377 mV, respectively. Cytotoxicity studies on estrogen receptor (ER) and folate receptor (FR) expressing breast cancer cells revealed that dual-targeted theranostic NPs (PB-UMN-CS-FA-ES-NPs) were more effective, inhibiting cell growth by 54.17 and 42.23 times in MCF-7 and T-47D cells compared to free PB, respectively. Additionally, developed NPs were capable of inhibiting the cell cycle progression of MCF-7 cells from the G1 phase to the S phase more efficiently compared to free PB. Ultrasound and photoacoustic (USG/PA) imaging demonstrated that dual targeted theranostic NPs were capable of effectively reducing hypoxic tumor volume and significantly suppressing tumor vascularity compared to free PB, nontargeted, FR targeted and ER targeted NPs. Moreover,
in vivo
optical imaging demonstrated tumor specific accumulation of the dual-targeted theranostic NPs. Furthermore,
in vitro
hemocompatibility and histopathological studies confirmed the biocompatibility of developed nanoformulations.