We demonstrate the synthesis of water-soluble allylamine-terminated Fe-doped Si (Si(xFe)) nanoparticles as bimodal agents for optical and magnetic imaging. The preparation involves the synthesis of a single-source iron-containing precursor, Na(4)Si(4) with x% Fe (x = 1, 5, 10), and its subsequent reaction with NH(4)Br to produce hydrogen-terminated Si(xFe) nanoparticles. The hydrogen-capped nanoparticles are further terminated with allylamine via thermal hydrosilylation. Transmission electron microscopy indicates that the average particle diameter is ∼3.0 ± 1.0 nm. The Si(5Fe) nanoparticles show strong photoluminescence quantum yield in water (∼10%) with significant T(2) contrast (r(2)/r(1) value of 4.31). Electron paramagnetic resonance and Mössbauer spectroscopies indicate that iron in the nanoparticles is in the +3 oxidation state. Analysis of cytotoxicity using the resazurin assay on HepG2 liver cells indicates that the particles have minimal toxicity.