Iron-containing silicon nanoparticles were synthesized in an attempt to understand the effect of iron on the silicon nanoparticle (SiNP) photoluminescence and singletoxygen generation capacity. A wet chemical oxidation procedure of the sodium silicide precursor, obtained from the thermal treatment in anaerobic conditions of a mixture of sodium, silicon, and an iron (III) organic salt under anaerobic conditions, was employed. Surface-oxidized and propylamine-terminated SiNPs were characterized using high-resolution transmission electron microscopy, X-ray photoelectron spectroscopy, time-resolved and steady-state photoluminescence, and time-correlated fluorescence anisotropy. Based on differences in the morphology, crystal structure, density, and photoluminescence spectrum, two distinct types of SiNPs were identified in a given synthesis batch: iron-free and iron-containing SiNPs. The results show that iron is inhomogeneously incorporated in the SiNPs leading to an efficient photoluminescence quenching. Emission arrives mainly from 2 nm size iron-free SiNPs.The nanoparticles were shown to generate singlet oxygen ( 1 O 2 ) upon 355 nm irradiation, though they were able to quench 1 O 2 . Analysis of cytotoxicity using MTT assay on rat glioma C6 cells showed a strong dependence on the nature of the surface groups, as 100 g/ml of propylamine-terminated iron-containing SiNPs leads to 85% decrease in cell viability while equal amounts of surface oxidized particles induced a 35% of cell death.