Water-soluble monodisperse superparamagnetic Fe3O4 nanocrystals decorated with two distinct functional groups are prepared in a single-step procedure by injecting iron precursors into a refluxing aqueous solution of a polymer ligand, trithiol-terminated poly(methacrylic acid) (PMAA-PTTM), bearing both carboxylate and thiol functionalities. The ratio of carboxylic acid groups in the polymer-protecting ligand to the iron precursors plays a key role in determining the particle size and particle size distribution. The surface functionalities of the ligands allow post-synthesis modification of the materials to produce water-soluble fluorescent magnetic nanocrystals.