A means for synthesizing paramagnetic nanoparticles composed of an Au-Fe alloy is described using pulsed laser deposition (PLD) of the alloy into a mesoporous alumina membrane template. Nanoparticles 46 ± 13 nm in diameter and composed of a 17% Fe alloy have been created by depositing a 35% Fe alloy into a template with 65 nm diameter pores. These paramagnetic nanoparticles had a saturation magnetization of 11.5 emu g −1 at 2000 G, and their UV-visible extinction spectrum was dominated by strong absorption similar to that of Fe 3 O 4 nanoparticles. The surfaces of these nanoparticles were readily functionalized with a dense monolayer of DNA oligonucleotides that had a 5 thiol group. The Au-Fe nanoparticles appear to be well suited for biotechnological applications and single molecule measurements as they can be synthesized in a specific size range, are strongly paramagnetic, and may be easily functionalized with biological macromolecules.