Large-scale and reproducible synthesis of nanomaterials is highly sought out for successful translation into clinics. Flame aerosol technology with its proven capacity to manufacture high purity materials (e.g., light guides) up to kg h(-1) is explored here for the preparation of highly magnetic, nonstoichiometric Zn-ferrite (Zn0.4 Fe2.6 O4 ) nanoparticles coated in situ with a nanothin SiO2 layer. The focus is on their suitability as magnetic multifunctional theranostic agents analyzing their T2 contrast enhancing capability for magnetic resonance imaging (MRI) and their magnetic hyperthermia performance. The primary particle size is closely controlled from 5 to 35 nm evaluating its impact on magnetic properties, MRI relaxivity, and magnetic heating performance. Most importantly, the addition of Zn in the flame precursor solution facilitates the growth of spinel Zn-ferrite crystals that exhibit superior magnetic properties over iron oxides typically made in flames. These properties result in strong MRI T2 contrast agents as shown on a 4.7 T small animal MRI scanner and lead to a more efficient heating with alternating magnetic fields. Also, by injecting Zn0.4 Fe2.6 O4 nanoparticle suspensions into pork tissue, MR-images are acquired at clinically relevant concentrations. Furthermore, the nanothin SiO2 shell facilitates functionalization with polymers, which improves the biocompatibility of the theranostic system.