We have recently reported that magnetic nanoparticles coated with oleic acid bilayer can form highly stable colloidal suspension in water. The particles were shown to extract and accommodate dye molecules inside its bilayer structure form solution and from solid surface. Here in, we design a novel colloidal system that can accommodate the dye and then gradually release the same as a function of time without the application of external stimuli. The host–guest type of system is composed of iron oxide nanoparticle as core and a self-dissolving mixed fatty acid bilayer as shell. Rhodamine 6G (R6G) dye was used as probe to study the controlled release process. Increased fluidity was shown to gradually denature the bilayer resulting in slow and controlled release of R6G. Fluidity of the bilayer was tuned with the addition of controlled amounts of linoleic acid. Iron oxide nanoparticles were characterized with high resolution transmission electron microscope and X-ray diffraction. Bilayer formation was characterized with pyrene probe experiments, Fourier transform Infrared spectroscopy, thermogravimetry and dynamic light scattering. Release profiles of R6G were studied in PBS and SBF buffer using fluorescence spectroscopy.