Nanometer-sized particles have novel optical, electronic, magnetic or structural properties and are currently under intense development for application in cancer, cardiovascular diseases, and degenerative neurological disorders such as alzheimer's disease. Targeted nanoparticle drugs offer significant advantages in improving cancer therapeutic efficacy and simultaneously reducing drug toxicity. We report here the synthesis, characterization and toxicity test of FeCo and Eu: Gd 2O 3 nanoparticles. Chemical routes, such ad coprecipitation and sol-gel techniques were used for the synthesis of the nanoparticles, and the surface of the nanoparticles was coated with silica. Structural and microstructural studies reveal that both type of nanoparticles 20 nm in size with very narrow size distribution. These nanoparticles demonstrate strong magnetic and optical properties at room temperature. Toxicity test shows that FeCo nanoparticles are very toxic, however toxicity decreases when the nanoparticles were coated with a thin layer of silica. However toxicity decreases when the nanoparticles were coated with a thin layer of silica. However, both uncoated and coated Eu:Gd 2O 3 nanoparticles show significantly reduced toxicity. Our results suggest that these nanoparticles are useful for biomedical applications. The detail of the results will be presented.