The synthesis of highly water-dispersible iron oxide nanoparticles with surface functional groups and precisely controlled sizes is essential for biomedical application. In this paper, we report a one-pot strategy for versatile surface functionalization. The iron oxide nanoparticles are first synthesized by thermal decomposition of iron(III) acetylacetonate (Fe(acac)(3)) in diethylene glycol (DEG), and their surfaces are modified by adding the surface ligands at the end of the reaction. The size of iron oxide nanoparticles can be precisely controlled in nanometer scale by continuous growth. This facile synthesis method enables the surface modification with different coating materials such as dopamine (DOPA), polyethylene glycol with thiol end group (thiol-PEG), and poly(acrylic acid) (PAA) onto the iron oxide nanoparticles, introducing new surface functionalities for future biomedical application. From transmission electron microscopy (TEM) and X-ray diffraction (XRD), the morphology and crystal structure are not changed during surface functionalization. The attachment of surface ligands is studied by Fourier transform infrared spectroscopy (FTIR) and Thermogravimetric Analysis (TGA). The surface functional groups are confirmed by X-ray Photoelectron Spectroscopy (XPS). In correlation with the change of hydrodynamic size, PAA coated nanoparticles are found to exhibit outstanding stability in aqueous solution. Furthermore, we demonstrate that the functional groups are available for conjugating with other molecules such as fluorescent dye, showing potential biological applications. Lastly, the magnetic resonance phantom studies demonstrate that iron oxide nanoparticles with PAA coating can be used as T-1 and T-2 dual-modality contrast agents. Both r(1) and r(2) relaxivities significantly increase after surface functionalization with PAA, indicating improved sensitivity.