Current dyeing techniques face growing environmental and economic challenges due to high consumption of water, salts, auxiliaries and energy, and production of substantial amounts of industrial polluting waste waters. We show here that dye-impregnated magnetic nanoparticles could be prepared to dye cotton fabrics and were recycled after the dyeing process using a magnet. In our approach, a conventional dye, Disperse Red 1 (DR1) was functionalized with trialkoxysilane groups through the nucleophilic addition reaction of 3-isocyanatopropyl triethoxysilane with DR1. The trialkoxysilane functionalized DR1 was used to coat the magnetic F3O4 nanoparticle cores through the Stöber method, yielding red magnetic F3O4@SiO2 core-shell nanoparticles. These red magnetic nanoparticles can be easily dispersed in water and their movement can be manipulated with a magnet. The resulting suspension was used to dye cotton fabrics without the presence of any salts and auxiliaries. Large surface area and high surface energy of the nanoparticles were believed to be responsible for their high affinity toward the fabrics which ensured high fastness. Moreover, after the dyeing process, un-bonded dye nanoparticles in the waste can be recycled with a magnet for future use, avoiding tedious wastewater treatment. Thus, this technique provides an environment friendly and cost-effective dyeing process that will greatly benefit the textile industry.