Iron oxide nanoparticles are commonly used contrast agents for theranostic nanomedicines because of their advantages of good biocompatibility, high stability in physiological conditions, low cytotoxicity and excellent safety record in clinical settings for human use. In this study, we developed a NIR-activated iron oxide (NIR-Fe3O4) nanoparticle as a new multi-functional contrast agent of photoacoustic (PA) imaging. Unlike traditional iron oxides, the developed NIR-Fe3O4 owns biocompatibility and optical tunability capable of providing strong optical absorption in the NIR range for PA signal generation. Its intrinsic magnetic property enables the active magnetic tumor targeting. Phantom experiments were performed to confirm the tunability of NIR-Fe3O4's optical absorption in NIR and demonstrate its magnetic targeting capability. The PA signal response of NIR-Fe3O4 as a function of concentration was also investigated. The results showed that the PA signal of NIR-Fe3O4 with OD=1.25 was comparable to that of blood at 715 nm - the wavelength of peak absorption of the used NIR-Fe3O 4. Moreover, the PA signal from NIR-Fe3O4 could be further improved by magnetic targeting. Overall, we proved that the potential of the developed NIR-Fe3O4 as a good tumor targeting contrast agent of PA imaging.