Surface engineering of various nanoparticles (NPs) is of growing interest and an important step to induce/control optical and/or catalytic activities. Although a wide variety of biomedical applications of magnetic Fe 3 O 4 NPs in diagnostics as well as therapeutics are well documented, the optical properties of the NPs still remain less well studied. Here we report a top-down fabrication methodology to modify a model ferrofluid with parent NPs sizes ∼23 nm, using tartrate as a functionalizing ligand as well as solubilizing agent. The surface engineering involves "ligand exchange" and simultaneous "phase transfer" of Fe 3 O 4 NPs (size ∼23 nm) from chloroform to water along with subsequent "core etching", resulting in a reduction of particle diameter to ∼5 nm. We demonstrate that tartrate-functionalized Fe 3 O 4 NPs (T-Fe 3 O 4 ) exhibit ligand to metal charge transfer transition in the UV spectral region, excellent blue luminescence, and efficient reusable photocatalytic activities which are completely absent in the parent NPs. We have used the functionalized NPs for the photodegradation of biomedically important jaundice marker bilirubin in aqueous solution. The surface adsorption of Mn ions on the surface of the TFe 3 O 4 NPs enables to control the degradation under UV light illumination. While the Mn-adsorbed T-Fe 3 O 4 NPs can efficiently degrade bilirubin in dark condition, the activity is significantly reduced under UV light. Finally, the detailed photocatalytic mechanism associated with ultrafast charge and energy transfer process has been discussed. We believe that bilirubin degradation rate can be controlled under UV light by varying Mn ion concentration on the NP's surface which can be a significant advancement for bilirubin degradation study. Overall, the results represent a promising route for the fabrication of Fe 3 O 4 NPs adaptable to diverse applications.