A new flexible nanostructure of [CoFe2O4/PVP]@[YAG:7%Tb3+/PVP] magnetic-luminescent bifunctional coaxial nanofibers is fabricated successfully by electrospinning technology using a homemade coaxial spinneret. The morphologies, structures, and magnetic and luminescent properties of the final products are investigated by modern determination techniques. The results show that the coaxial nanofibers simultaneously provide better magnetic and luminescent properties than CoFe2O4/YAG:7%Tb3+/PVP composite nanofibers owing to the isolation of the YAG:7%Tb3+ luminescent nanofibers from the CoFe2O4 magnetic nanofibers. Furthermore, the luminescent characteristics and saturation magnetizations of the coaxial nanofibers can be tuned by adjusting the contents of luminescent and magnetic compounds. The formation mechanism of coaxial nanofibers is also presented. More importantly, the design concept and construction technology are of universal significance for the fabrication of other bifunctional coaxial nanofibers.