Fe3O4-Ag heterodimer nanocomposites of tunable sizes are synthesized with high yield under mild conditions, without the loss of high magnetic moment. A ligand-exchange scheme is devised utilizing the bifunctionality of the heterodimer system to render the nanocomposite soluble in aqueous solutions. Cells labeled with the heterodimer nanoparticles can be magnetically manipulated and imaged with two-photon fluorescence microscopy.