Multifunctional Fe₃O₄@Gd₂O₃∶Eu³⁺ hollow nanospheres are prepared via a urea-based homogeneous precipitation method. The multifunctional layers are designed to a shell- shell structure to avoid the magnetic nanoparticles clustering. Scanning electron microscope (SEM) and transmission electron microscope (TEM) images indicate that the as-obtained Fe₃O₄@Gd₂O₃∶Eu³⁺ sample consists of uniform nanospheres with an average diameter of 390 nm, and the thicknesses of magnetic and fluorescent layers are about 55 nm and 15 nm, respectively. The shell thickness and the size of the hollow nanospheres can easily be controlled via adjusting the concentration of raw materials and the size of silica template. The sample of Fe₃O₄@Gd₂O₃∶Eu³⁺ shows high saturation magnetization of 17.1 emu/g and strong red emission under ultraviolet excitation, which may be applied in targeted therapy, immune detection, magnetic separation, luminescence detection and so on. This synthesis route is of great significance in the controllable synthesis of other multifunctional hollow nanospheres as well.