Multifunctional nanostructures with both diagnostic and therapeutic capabilities have attracted considerable attention in biomedical research because they can offer great advantages in disease management and prognosis. In this work, a facile way to transfer the hydrophobic iron oxide (IO) nanoparticles into aqueous media by employing carboxylic graphene oxide (GO-COOH) as the transferring agent has been reported. In this one-step process, IO nanoparticles adhere to GO-COOH and form water-dispersible clusters via hydrophobic interactions between the hydrophobic ligands of IO nanoparticles and the basal plane of GO-COOH. The multiple IO nanoparticles on GO-COOH sheets (IO/GO-COOH) present a significant increase in T2 contrast enhancement. Moreover, the IO/GO-COOH nanoclusters also display a high photothermal conversion efficiency and can effectively inhibit tumor growth through the photothermal effects. It is envisioned that such IO/GO-COOH nanocomposites combining efficient MRI and photothermal therapy hold great promise in theranostic applications.