Multifunctional nanoparticles for biomedical applications have shown extraordinary potential as contrast agents in various bioimaging modalities, near-IR photothermal therapy, and for lighttriggered therapeutic release processes. Over the past several years, numerous studies have been performed to synthesize and enhance MRI contrast with nanoparticles. However, understanding the MRI enhancement mechanism in a multishell nanoparticle geometry, and controlling its properties, remains a challenge. To systematically examine MRI enhancement in a nanoparticle geometry, we have synthesized MRI-active Au nanomatryoshkas. These are Au coresilica layer-Au shell nanoparticles, where Gd(III) ions are encapsulated within the silica layer between the inner core and outer Au layer of the nanoparticle (Gd-NM). This multifunctional nanoparticle retains its strong near-IR Fano-resonant optical absorption properties essential for photothermal or other near-IR light-triggered therapy, while simultaneously providing increased T 1 contrast in MR imaging by concentrating Gd(III) within the nanoparticle. Measurements of Gd-NM revealed a strongly enhanced T 1 relaxivity (r 1 ⌠24 mM