Many applications require nanoparticles that exhibit high magnetic moment and luminescence. Compounds exhibiting this combination of properties do not exist. However, this combination of properties may be obtained by nanocomposites. There are two possible configurations for these composites: the core–shell design, leading to the smallest composite particles, and agglomerates containing separated particles with the properties in question. The magnetic core is, in most cases, maghemite or magnetite, whereas the luminescence carrier is either an organic molecule or an inorganic quantum dot. One of the basic problems in designing such composites, to be overcome by the appropriate layout choice, is the potential incompatibility between the magnetic core and the lumophore. Experimentally realized solutions of these problems are presented.