Magnetic nanoparticles Fe3O4 were prepared by hydrothermal coprecipitation of ferric and ferrous ions using NaOH. The surface modification of Fe3O4 nanoparticle by dendrimers has rendered the nanoparticle surface with enriched amine groups which facilitated the adsorption and conjugation of thioglycolic acid (TGA) modified CdTe quantum dots to form a stable hybrid nanostructure. Three generations (first generation: G0F, second generation: G1F, third generation: G3F) of bifunctional dendrimeric Fe3O4/CdTe nanoparticles were successfully prepared using this technique and characterized by microscopy. The optical and magnetic properties of the dendrimeric Fe3O4/CdTe nanoparticle were also investigated. The microscopic study reveals 3 different sizes for 3 generations, 16 nm (G0F), 31 nm (G1F) and 47 nm (G3F). Among three generations of nanoparticles, the G1F has the best optical property with a luminescent quantum yield of 25.6% and the G0F has the best magnetic property with a saturation magnetization of 19.3 em mu/g. (C) 2015 Elsevier Ltd. All rights reserved.