A new synthesis protocol is described to obtain a CdTe decorated magnetite bifunctional nanosystem via dodecylamine (DDA) as cross linker. High resolution transmission electron microscopy (HRTEM), energy-dispersive x-ray spectroscopy (EDAX), vibrating sample magnetometry (VSM), Fourier transform infrared spectroscopy (FTIR), diffuse reflectance spectroscopy (DRS) and fluorescence microscopy are used to characterize the constitution, size, composition and physical properties of these superparamagnetic-fluorescent nanoparticles. These CdTe decorated magnetite nanoparticles were then functionalized with anti-epidermal growth factor receptor (EGFR) antibody to specifically target cells expressing this receptor. The EGFR is a transmembrane glycoprotein and is expressed on tumor cells from different tissue origins including human leukemic cell line Molt-4 cells. The magnetite-CdTe composite nanosystem is shown to perform excellently for specific selection, magnetic separation and fluorescent detection of EGFR positive Molt-4 cells from a mixed population. Flow cytometry and confocal laser scanning microscopy results show that this composite nanosystem has great potential in antibody functionalized magnetic separation and imaging of cells using cell surface receptor antibody.