This communication describes a simple, general route for preparing bifunctional hybrid nanoparticles based on direct adsorption and spontaneous reduction of Ag⁺ and Pd²⁺ onto the surface of carbon-encapsulated superparamagnetic colloidal nanoclusters. Because of the existence of carbon coating and surface hydrophilic carboxyl, the bifunctional hybrid nanoparticles show excellent water-dispersity. In addition, the size (35 nm–86 nm) and number of Ag nanocrystals can be tuned by changing the molar ratios and reaction concentration between Ag⁺ and nanoclusters.