Monodisperse and ultrasmall gadolinium oxide (GdO) nanoparticle colloids ( = 1.5 nm) (nanoparticle colloid = nanoparticle coated with hydrophilic ligand) were synthesized and their performance as a multifunctional tumor theragnostic agent was investigated. The aqueous ultrasmall nanoparticle colloidal suspension was stable and non-toxic owing to hydrophilic polyacrylic acid (PAA) coating that was partly conjugated with rhodamine B (Rho) for an additional functionalization (mole ratio of PAA : Rho = 5 : 1). First, the ultrasmall nanoparticle colloids performed well as a powerful T magnetic resonance imaging (MRI) contrast agent: they exhibited a very high longitudinal water proton relaxivity ( ) of 22.6 s mM ( / = 1.3, = transverse water proton relaxivity), which was ∼6 times higher than those of commercial Gd-chelates, and high positive contrast enhancements in T MR images in a nude mouse after intravenous administration. Second, the ultrasmall nanoparticle colloids were applied to gadolinium neutron capture therapy (GdNCT) and exhibited a significant U87MG tumor cell death (28.1% net value) after thermal neutron beam irradiation, which was 1.75 times higher than that obtained using commercial Gadovist. Third, the ultrasmall nanoparticle colloids exhibited stronger fluorescent intensities in tumor cells than in normal cells owing to conjugated Rho, proving their pH-sensitive fluorescent tumor cell detection ability. All these results together demonstrate that ultrasmall GdO nanoparticle colloids are the potential multifunctional tumor theragnostic agent.