Fe3O4/SiO2/YVO4:Eu3+ multifunctional nanoparticles are successfully synthesized by facile stepwise sol-gel processes. The multifunctional nanoparticles show a spherical shape with narrow size distribution (approximately 40 nm) and the phosphor shells are well crystallized. The Eu3+ shows strong photoluminescence (red emission at 619 nm, absorbance at 290 nm) due to an effective energy transfer from the vanadate group to Eu. Core-shell structured multifunctional nanoparticles have superparamagnetic properties at 300 K. Furthermore, the core-shell nanoparticles have a quick response time for the external magnetic field. These results suggest that the photoluminescence and magnetic properties could be easily tuned by either varying the number of coating processes or changing the phosphor elements. The nanoparticles may have potential applications for appropriate fields such as laser systems, optical amplifiers, security systems, and drug delivery materials.