We demonstrated a unique approach that combines a layer-by-layer (LbL) self-assembly method with dendrimer chemistry to functionalize Fe3O4 nanoparticles (NPs) for specific targeting and imaging of cancer cells. In this approach, positively charged Fe3O4 NPs (8.4 nm in diameter) synthesized by controlled co-precipitation of Fe-II and Fe-III ions were modified with a bilayer composed of polystyrene sulfonate sodium salt and folic acid (FA)- and fluorescein isothiocyanate (FI)-functionalized poly(amidoamine) dendrimers of generation 5 (G5.NH2-FI-FA) through electrostatic LbL assembly, followed by an acetylation reaction to neutralize the remaining surface amine groups of G5 dendrimers. Combined flow cytometry, confocal microscopy, transmission electron microscopy, and magnetic resonance imaging studies show that Fe3O4/PSS/G5.NHAc-FI-FA NPs can specifically target cancer cells overexpressing FA receptors. The present approach to functionalizing Fe3O4 NPS opens a new avenue to fabricating various NPs for numerous biological sensing and therapeutic applications.