Luminomagnetic nanostructured Nd3+ doped fluorapatite (FAP) coated Fe3O4 nanoparticles were produced by hydrothermal method. X-ray diffraction analysis indicates that the prepared nanoparticles contain both FAP and Fe3O4 phases. Electron microscope analysis shows the formation of nanoparticles of Fe3O4 encased in rod shaped FAP nanoparticles of average length 40 nm. Magnetic measurements confirm the room temperature superparamagnetic nature of the nanoparticles with saturation magnetization value up to 7.8 emu/g. The prepared nanoparticles display strong near infrared (NIR) emission at 1060 nm under 800 nm excitation. Cell viability studies for 72 hour demonstrate the survival rate of over 84% with 500 mu g/mL concentration indicating the good cytocompatibility of the prepared materials. The present Nd3+ doped FAP coated Fe3O4 nanostructure provides an excellent multifunctional platform for diagnostics and therapeutic applications.