Hybrid nanoparticles with magnetic poly (lactide-co-glycolide) (PLGA) nanoparticle 'core', surface modified with folate-chitosan (fol-cht) conjugate 'shell' are evaluated as simultaneous anti-cancer therapeutic and MRI contrast agent. The fol-cht conjugate is prepared using carbodiimide crosslinking chemistry at an optimized folate to amine (chitosan) molar ratio for further coating on PLGA nanoparticles loaded with docetaxel and well packed super paramagnetic iron oxide nanoparticles (SPIONs). Apart from possessing a targeting moiety, the coating provides a physical barrier to avoid undesired burst release of drug and also imparts sensitivity to acidic pH, due to protonated amine group dependent decondensation of the coating and subsequent drug release. The biocompatible hybrid nanoparticles provide receptor targeted docetaxel and SPION delivery for anti-cancer therapy and magnetic resonance (MR) imaging respectively, as tested in both folate receptor positive and negative cancer cells. Enhancement in nanoparticle uptake by folate receptor positive oral cancer cells caused significant increase in docetaxel mediated cytotoxicity. While polymeric encapsulation and fol-cht coating negatively affects the magnetic property of iron oxide nanoparticles, their aggregation in the core, shortened the overall T-2 relaxation time thereby enhancing the nanoparticle relaxivity to provide better in vitro MR imaging. (C) 2016 Elsevier Inc. All rights reserved.