Oils containing both fluorescent semiconductor and magnetic oxide nanoparticles are used to produce oil in water emulsions. This technique produces oil droplets with homogeneous fluorescence and high magnetic nanoparticle concentrations. The optical properties of the oil droplets are studied as a function of the droplet sizes for various concentrations of fluorescent and magnetic nanoparticles. For all concentrations tested, we find a linear variation of the droplet fluorescent intensity as a function of the droplet volume. For a given size and a given quantum dot (QD) concentration, the droplet fluorescence intensity drops sharply as a function of the magnetic nanoparticle concentration. We show that this decrease is due mainly to the strong absorption cross section of the magnetic nanoparticles and to a lesser extent to the dynamic and static quenching of the QD fluorescence. The role of the iron oxide nanoparticle localization in the droplet (surface versus volume) is also discussed.