We report the preparation of bifunctional silver–iron oxide composite nanostructures (Ag@Fe2O3) and demonstrate their magnetic separation with an analyte molecule from silver nanoparticles in a mixed solution. Magnetic and non-magnetic plasmonic nanostructures and their separation are monitored by the surface-enhanced Raman scattering (SERS) spectra of two different analytes attached to each kind of particles. In general, such separation experiments can provide insight into basic phenomena of adsorption and exchange of adsorbed molecules which are of strong interest in SERS. The formation of stable Ag@Fe2O3 nanoparticle–molecule complexes suggests small magnetic SERS labels without additional protective layers for application in analytical assays. The magnetic plasmonic nanostructures have great promise for targeted imaging and sensing in biological structures by directing nanosensors to places of interest using magnetic fields. The option of magnetic separation and collection of plasmonic particles improves the analytical capabilities of SERS. Copyright © 2012 John Wiley & Sons, Ltd.