Neodymium hydroxide (Nd(OH)3)-surface modified mesoporous silica micro-cocoon microstructures were prepared using a facile single-step sol-gel chemical process. XRD revealed the semi-crystalline nature of the as-prepared materials. TEM and SEM micrographs exhibited highly monodisperse, non-aggregated, typical ordered mesoporous, and irregular sized cocoon-shaped micro-structures with a narrow size distribution. Optical properties, that were examined in the aqueous media, revealed a high colloidal stability and the formation of a semi-transparent colloidal solution. The colloidal solution of Nd(OH)3-surface functionalized micro-structures revealed well characteristics absorption bands of Nd3+ ions in the visible region. thus validating the successful coating of SiO2@Nd(OH)3 layer over the surface silica forming core-shell structures. Zeta potential, 3-(4,5-Dimethylthiazol-2-yl)-2,5-diphenyltetrazolium) bromide, and neutral red uptake assays were applied in a dose-dependent manner to investigate the biocompatibility and toxic potential of the designed cocoon-shaped microstructures. Both the assays and the high zeta potential value demonstrated good cell viability even at high concentrations and hydrophilic conditions, indicating excellent biocompatibility and non-toxicity. These highly hydrophilic, optically active, mesoporous, biocompatible, and non-toxic cocoon-shaped microstructures could be potentially suitable candidates for optical bio-probes and drug delivery applications.