The in vivo applications of gas-core microbubbles have been limited by gas diffusion, rapid body clearance, and poor vascular permeability. To overcome these limitations, using a modified three-step emulsion process, we have developed a first-of-its-kind India ink incorporated optically-triggerable phase-transition perfluorocarbon nanodroplets (INDs) that can provide not only three types of contrast mechanisms—conventional/thermoelastic photoacoustic, phase-transition/nonlinear photoacoustic, and ultrasound imaging contrasts, but also a new avenue for photoacoustic effect mediated tumor therapy. Upon pulsed laser illumination above a relatively low energy threshold, liquid-gas phase transition of the INDs has been demonstrated both in vitro and in vivo, offering excellent contrasts for photoacoustic and ultrasound dual-modality imaging. With further increased laser energy, the nanodroplets have been shown to be capable of destructing cancer cells in vivo, presumably due to the photoacoustic effect induced shock-wave generation from the carbon particles of the incorporated India ink. The demonstrated results suggest that the developed multifunctional phase-transition nanodroplets have a great potential for many theranostic biomedical applications, including photoacoustic/ultrasound dual-modality molecular imaging and targeted, localized cancer therapy.