Bi-functional nanoparticles (NPs) that consist of silica-coated magnetic cores and luminescent lanthanide (Ln) ions anchored on the silica surface via organic linker molecules are reported. Compared to individual Ln ions, the hybrid NPs show a drastically enhanced photoluminescence due to the efficient ligand-to-metal energy transfer in the Ln-loaded NPs: the new bi-functional NPs could be used in a variety of biological applications involving magnetic separation and optical detection.