We report a novel drug delivery system composed of layer-by-layer (LBL) milk protein casein (CN) coated iron oxide nanoparticles. Doxorubicin (DOX) and indocyanine green (ICG) were selected as model drug molecules, which were incorporated into the inner polymeric layer, and subsequently coated with casein. The resulting casein coated iron oxide nanoparticles (CN-DOX/ICG-IO) were stable in the acidic gastric condition with the presence of gastric protease. On the other hand, the loaded drugs were released when the casein outer layer was gradually degraded by the intestinal protease in the simulated intestine condition. Such unique properties enable maintenance of the bioactivity of the drugs and thus enhance the drug delivery efficiency. Ex vivo experiments showed that the LBL CN-DOX-IO improved the translocation of DOX across microvilli and its absorption in the small intestine sacs. In vivo imaging of mice that were orally administered with these LBL CN-ICG-IO nanostructures further confirmed that the reported drug delivery vehicles could pass the stomach without significant degradation, and then accumulated in the small intestine. In addition, the magnetic iron oxide nanoparticle core offered an MRI contrast enhancing capability for in vivo imaging guided drug delivery. Therefore, the reported LBL CN-DOX/ICG-IO is a promising oral drug delivery nanoplatform, especially for drugs that are poorly soluble in water or degradable in the gastric environment.