We report the synthesis and characterization of folic acid (FA)-modified multifunctional dendrimer-entrapped gold nanoparticles (Au DENPs) loaded with gadolinium (Gd) for targeted dual mode computed tomography (CT)/magnetic resonance (MR) imaging of tumors. In this work, amine-terminated generation 5 poly(amidoamine) dendrimers (G5.NH2) modified with Gd(III) chelator, polyethylene glycol (PEG) monomethyl ether, and PEGylated FA were used as templates to entrap gold nanoparticles (AuNPs). Further chelation of Gd(III) ions and acetylation of the remaining dendrimer terminal amines led to the formation of multifunctional FA-targeted Au DENPs loaded with Gd(III) (Gd-Au DENPs-FA). The formed Gd-Au DENPs-FA probes were characterized via different techniques. We show that the Gd-Au DENPs-FA probes with an Au NP core size of 4.0 nm are water dispersible, stable under different pH and temperature conditions, and cytocompatible in the given concentration range. With the co-existence of AuNPs and Gd(III) ions within the single multifunctional particles, Gd-Au DENPs-FA displayed high X-ray attenuation intensity and reasonable r1 relaxivity. These properties of the particles enabled them to be used as dual mode nanoprobes for targeted CT/MR imaging of cancer cells in vitro and xenograft tumor model in vivo via FA receptor-mediated active targeting pathway. The strategy to design multifunctional nanoprobes using the versatile dendrimer nanotechnology may be extended to design various dual mode or multimode imaging agents for accurate diagnosis of different types of cancer.