The diagnosis and treatment of solid tumors may be improved by tailoring nanoparticles for drug delivery and medical imaging. The core of the nanoparticle can offer diagnostic imaging capabilities while simultaneously providing a multivalent scaffold for other moieties that impart additional functions such as improved pharmacokinetics and remote sensing. To move towards these goals, this thesis explores methods to traffic particles in living systems, delivery of therapeutic cargo, the biocompatibility of nanomaterials, and strategies to exploit the utility of the nanoparticle core. This work employs two inorganic nanoparticle cores that can be visualized, luminescent semiconductor quantum dots (QDs) and superparamagnetic iron oxide nanocrystals, and explores adding functionality to these scaffolds in a 'modular' fashion such that they can later be combined for specific applications. While many therapeutic 'payloads' act intracellularly, cell membranes are impermeable to unmodified inorganic nanoparticles, as they are to free oligonucleotides. Given their similar size and charge, we explored gene delivery methods to ferry QDs across the lipid bilayer. Trafficking these particles to subcellular organelles required intracellular monodisperity achieved through microinjection; however, therapeutic cargo (small interfering RNA) could be efficiently delivered along with nanoparticle aggregates via complexation with cationic liposomes. To further enable systemic delivery, the functions of the cationic liposome (multivalent carrier for siRNA, cellular uptake, endosomal escape) were replaced with chemical crosslinkers and tumor homing peptides derived from in vivo phage display. One concern regarding the systemic use of cadmium-containing particles is the potential release of cytotoxic components. We found that breakdown of the CdSe core can occur in oxidative environments, but can also be largely mitigated by the use of additional capping layers. Finally, we explored the use of iron oxide nanoparticle cores as they have the potential to act as transducers of external energy to actuate the release of a model therapeutic on demand. Electromagnetic fields generate local heating of iron oxide, which was harnessed to cleave a tunable heat-labile bond. Collectively, our investigations into delivery, biocompatibility, and remote actuation form an integrated basis for the vision of multifunctional nanoparticles that combine diagnostic and therapeutic capabilities