Magnetic Fe3O4 nanoparticles “decorated” by LAPONITE® nanodisks have been materialized utilizing the Schikorr reaction following a facile approach and tested as mediators of heat for localized magnetic hyperthermia (MH) and as magnetic resonance imaging (MRI) agents. The synthetic protocol involves the interaction between two layered inorganic compounds, ferrous hydroxide, Fe(OH)2, and the synthetic smectite LAPONITE® clay Na0.7+[(Si8Mg5.5Li0.3)O20(OH)4]0.7−, towards the formation of superparamagnetic Fe3O4 nanoparticles, which are well decorated by the diamagnetic clay nanodisks. The latter imparts high negative ζ-potential values (up to −34.1 mV) to the particles, which provide stability against flocculation and precipitation, resulting in stable water dispersions. The obtained LAPONITE®-“decorated” Fe3O4 nanohybrids were characterized by powder X-ray diffraction (XRD), transmission electron microscopy (TEM), Mössbauer spectroscopy, dynamic light scattering (DLS) and vibrating sample magnetometry (VSM) at room temperature, revealing superior magnetic hyperthermia performance with specific absorption rate (SAR) values reaching 540 W gFe−1 (28 kA m−1, 150 kHz) for the hybrid material with a magnetic loading of 50 wt% Fe3O4/LAPONITE®. Toxicity studies were also performed with human glioblastoma (GBM) cells and human foreskin fibroblasts (HFF), which show negligible to no toxicity. Furthermore, T2-weighted MR imaging of rodent brain shows that the LAPONITE®-“decorated” Fe3O4 nanohybrids predominantly affected the transverse T2 relaxation time of tissue water, which resulted in a signal drop on the MRI T2-weighted imaging, allowing for imaging of the magnetic nanoparticles.