With the special nature of confined water pools, reverse micelles (RMs) have shown potential for a wide range of applications. However, the inherent water insolubility of RMs hinders their further application prospect especially for applications related to biology. We present herein the first successful transformation of water-insoluble RMs into water-soluble nanoparticles without changing the confined aqueous interiors by hydrolysis/aminolysis of arm-cleavable interfacial cross-linked reverse micelles formed from diester surfactant 1. The unique properties exhibited by the aqueous interiors of the resulting pool-buried water-soluble nanoparticles (PWNPs) were demonstrated both by the template synthesis of gold nanoparticles in the absence of external reductants and by the fluorescence enhancement of encapsulated thioflavin T (ThT). Importantly, the unique potential for PWNPs in biological applications was exemplified by the use of ThT@PWNPs and "cell targeted" ThT@PWNPs as effective optical imaging agents of living cells. This work conceptually overcomes the application bottleneck of RMs and opens an entry to a new class of functional materials.