We report a biphasic system (BPS) consisting of PEGylated Tb(3+)-doped GdPO4 nanorice sensitized with Ce(3+) (PEG-NRs) and glutamic acid coated iron oxide nanoparticles (IONPs) with multifunctional capabilities. The mesoporous PEG-NRs exhibit green light luminescence properties and a high degree of aqueous stability. Their drug loading and release capacities were investigated for anti-cancer chemo doxorubicin (DOX). Their mesoporous nature and availability of plenty of negatively charged functional groups (-COO(-)) on the surface of PEG-NRs facilitate approximately 94 wt% DOX loading. In vitro studies carried out for PEG-NRs and their biphasic integrated system with iron oxide using HeLa and MCF-7 cell lines demonstrated their cell killing efficacy. The green luminescence observed under confocal laser scanning microscopy (CLSM) confirms the cellular uptake of PEG-NRs by HeLa cell lines and their accumulation in the cytoplasm. Approximately 50-55% of HeLa and MCF-7 cell death was observed after 24 h of incubation with DOX loaded BPS (2 mg IONPs and 0.25 mg PEG-NRs + DOX), which further increased to about 90% when exposed to an AC magnetic field (ACMF) for 25 min. Our findings demonstrate that the therapeutic efficacy of BPS loaded with DOX could be a powerful multimodal system for imaging and synergistic chemo-thermal cancer therapy.