This report describes the preparation and characterization of new magnetic fluorescent nanoparticles and our success in using them to label living cells. The bifunctional nanoparticles possess a magnetic oxide core composed of a dimercaptosuccinic acid (DMSA) ligand at the surface and a covalently attached fluorescent dye. The nanoparticles exhibited a high affinity for cells, which was demonstrated by fluorescence microscopy and magnetophoresis. Fluorescence microscopy was used to monitor the localization patterns of magnetic nanoparticles associated with cells. We observed two types of magnetic labeling:  adsorption of the nanoparticles on the cell membrane (membranous fluorescence) and internalization of the nanoparticles inside the cell (intracellular vesicular fluorescence). After internalization, nanoparticles were confined inside endosomes, which are submicrometric vesicles of the endocytotic pathway. We demonstrated that endosome movement could be piloted inside the cell by external magnetic fields such that small fluorescent chains of magnetic endosomes were formed in the cell cytoplasm in the direction of the applied magnetic field. Finally, by measuring the critical cellular magnetic load (quantitated by magnetophoresis), we have demonstrated the potential of this new magneto-fluorescent nanoagent for medical use.