Photodynamic therapy (PDT) is an approved modality for the treatment of various types of maligancies and diseased states. However, most of the available photosensitizers (PS) are highly hydrophobic, which limits their solubility and dispersion in biological fluids and can lead to self-quenching and sub-optimal therapeutic efficacy. In this study, chlorin e6 (Ce6)-coated superparamagnetic iron oxide nanoparticle (SPION) nanoclusters (Ce6-SCs) were prepared via an oil-in-water emulsion. The physical-chemical properties of the Ce6-SCs were systematically evaluated. Dual-mode imaging and PDT was subsequently performed in tumor-bearing mice. Chlorin e6 is capable of solubilizing hydrophobic SPION into stable, water-soluble nanoclusters without the use of any additional amphiphiles or carriers. The method is reproducible and the Ce6-SCs are highly stable under physiological conditions. The Ce6-SCs have an average diameter of 92 nm and low polydispersity (average PDI < 0.2). Encapsulation efficiency of both Ce6 and SPION is ≈100%, and the total Ce6 payload can be as high as 56% of the total weight (Ce6 + Fe). The Ce6-SCs localize within tumors via enhanced permeability and retention and are detectable by magnetic resonance (MR) and optical imaging. With PDT, Ce6-SCs demonstrate high singlet oxygen generation and produce a significant delay in tumor growth in mice.