This paper demonstrates a proof-of-concept approach for encapsulating the anticancer drug tamoxifen, Fe3O4nanoparticles (NPs) and CdTe quantum dots (QDs) into size-controlled polycaprolactone (PCL) microcapsules utilizing microfluidic emulsification, which combined magnetic targeting, fluorescence imaging and drug controlled release properties into one drug delivery system. Cross-linking the composite PCL microcapsules with poly(vinyl alcohol) (PVA) tailored their size, morphology, optical and magnetic properties and drug release behaviors. The flow conditions of the two immiscible solutions were adjusted in order to successfully generate various sizes of polymer droplets. The result showed superparamagnetic and fluorescent properties, and was used as a controlled drug release vehicle. The composite magnetic and fluorescent PCL microcapsules are potential candidates for a smart drug delivery system.