Organically modified silica nanoparticles doped with Nile Red were synthesized and characterized. Silica encapsulation is relatively transparent for light and can protect hydrophobic Nile Red against denaturalization induced by the extreme bio-environment, making the entire nanoparticle hydrophilic and possess stable optical properties. The nanoparticles were conjugated with bio-molecules (such as apo-transferrin and folic acid), and our in vitro experiments revealed that these functionalized nanoparticles can serve as effective optical probes for specific targeting of cancer cells. As a preliminary study for future in vivo animal experiment, ORMOSIL nanoparticles were further co-conjugated with polyethyleneglycol (PEG) and apo-transferrin and the conjugates were also very good for in vitro targeting of HeLa cells. These bio-molecule functionalized ORMOSIL nanoparticles may serve as a robust tool for early diagnosis/therapy of cancer and other diseases.