Multifunction bismuth-based nanoparticles with the ability to display diagnostic and therapeutic functions have drawn extensive attention as theranostic agents in radiation therapy and imaging due to their high atomic number, low toxicity, and low cost. Herein, we tried to introduce multifunction bismuth gadolinium oxide nanoparticles (BiGdO3) as a new theranostic agent for radiation therapy, computed tomography (CT) and magnetic resonance imaging (MRI). After synthesis of BiGdO3 nanoparticles and surface modifications of them with PEG, biocompatibility of the nanoparticles was evaluated by a CCK-8 assay. We investigated dose amplification properties of the nanoparticles using gel dosimetry and in vitro and in vivo assays. According to clonogenic assay radiation, a sensitizer enhancement ratio (SER) of 1.75 and 1.66 (100 µg ml−1-nanoparticles), for MCF-7 and 4T1 cell lines at low energy x-ray was achieved, respectively. Radiation dose enhancement effect of the nanoparticles was proven for high concentrations (500 µg ml−1) by gel dosimetry. For further investigation, in vivo cancer radiotherapy was carried out using female BALB/c mice with 4T1 breast tumors. In vivo results emphasized the radiosensitizing effect of BiGdO3-PEG nanoparticles. Both bismuth and gadolinium provide CT contrast, while gadolinium can be employed for MRI T1 contrast, so we evaluated contrast enhancement of BiGdO3-PEG nanoparticles as a dual-modal imaging agent in MR and CT imaging. Collectively, our experimental results clearly display properties of BiGdO3-PEG nanoparticles as multimodal imaging and radiosensitizing agents. The results show that the nanoparticles deserve further study as a new theranostic agent.