In this work, we prepared polyacrylic acid (PAA) coated gold nanorods (GNRs) and then the targeting peptide modified GNRs. The biocompatibility and stability of functionalized GNRs were investigated by monitoring the surface plasmon resonance (SPR) absorption intensity. The efficacy of targeted thermal therapy can be significantly enhanced via decoration with surface-bound peptide which was obtained through phage display technology. In addition, the photothermal therapy was monitored in real time with the multi-channel function of a confocal laser scanning microscope (CLSM) coupled with an 808 nm laser. This selective photothermal therapy of GNRs is a promising candidate for phototherapeutic applications.