Carbon-protected magnetic nanoparticles exhibit long-term stability in acid or alkaline medium, good biocompatibility, and high saturation magnetization. As a result, they hold great promise for magnetic resonance imaging, photothermal therapy, etc. However, since pyrolysis, which is often required to convert the carbon precursors to carbon, typically leads to coalescence of the nanoparticles, the obtained carbon-protected magnetic nanoparticles are usually sintered as a non-dispersible aggregation. We have successfully synthesized discrete, dispersible, and uniform carbon-protected magnetic nanoparticles via a precise surface/interface nano-engineering approach. Remarkably, the nanoparticles possess excellent water-dispersibility, biocompatibility, a high T₂ relaxivity coefficient (384 mM^–1·s^–1), and a high photothermal heating effect. Furthermore, they can be used as multifunctional core components suited for future extended investigation in early diagnosis, detection and therapy, catalysis, separation, and magnetism.