Recently, near-infrared (NIR) absorbing conjugated polymeric nanoparticles have received significant attention in photothermal therapy of cancer. Herein, polypyrrole (PPy), a NIR-absorbing conjugate polymer, is used to coat ultra-small iron oxide nanoparticles (IONPs), obtaining multifunctional IONP@PPy nanocomposite which is further modified by the biocompatible polyethylene glycol (PEG) through a layer-by-layer method to acquire high stability in physiological solutions. Utilizing the optical and magnetic properties of the yielded IONP@PPy-PEG nanoparticles, in vivo magnetic resonance (MR) and photoacoustic imaging of tumor-bearing mice are conducted, revealing strong tumor uptake of those nanoparticles after intravenous injection. In vivo photothermal therapy is then designed and carried out, achieving excellent tumor ablation therapeutic effect in mice experiments. These results promise the use of multifunctional NIR-absorbing organic-inorganic hybrid nanomaterials, such as IONP@PPy-PEG presented here, for potential applications in cancer theranostics.