Magnetic iron oxide nanoparticles (IONPs), for their intriguing properties, have attracted a great interest as they can be employed in many different biomedical applications. In this multidisciplinary study, we synthetized and characterized ultrafine 3 nm superparamagnetic water-dispersible nanoparticles. By a facile and inexpensive one-pot approach, nanoparticles were coated with a shell of silica and contemporarily functionalized with fluorescein isothiocyanate (FITC) dye. The obtained sub-5 nm silica-coated magnetic iron oxide fluorescent (sub-5 SIO-Fl) nanoparticles were assayed for cellular uptake, biocompatibility and cytotoxicity in a human colon cancer cellular model. By confocal microscopy analysis we demonstrated that nanoparticles as-synthesized are internalized and do not interfere with the CaCo-2 cell cytoskeletal organization nor with their cellular adhesion. We assessed that they do not exhibit cytotoxicity, providing evidence that they do not affect shape, proliferation, cellular viability, cell cycle distribution and progression. We further demonstrated at molecular level that these nanoparticles do not interfere with the expression of key differentiation markers and do not affect pro-inflammatory cytokines response in Caco-2 cells. Overall, these results showed the in vitro biocompatibility of the sub-5 SIO-Fl nanoparticles promising their safe employ for diagnostic and therapeutic biomedical applications.