Indocyanine green (ICG) is an optical contrast agent commonly used for a variety of imaging applications. However, certain limitations of the free dye molecule, concerning its low stability, uncontrolled aggregation and lack of targeting ability, have limited its use. Presented here is a method of embedding ICG in a novel polymer–protein hybrid nanocarrier so as to overcome the above inherent drawbacks of the free molecule. The hybrid nanocarrier consists of a non-toxic and biocompatible polyacrylamide nanoparticle (PAA NP) matrix that incorporates human serum albumin (HSA). This nanocarrier was synthesized through pre-conjugation with HSA and amine functionalized monomer, followed by polymerization using biodegradable cross-linkers, in a water-in-oil emulsion. The ICG dye is loaded into the HSA conjugated PAA nanoparticles (HSA–PAA NPs) through post-loading. Compared to the PAA polymer matrix, the presence of hydrophobic pockets in the HSA–PAA NPs further increases the chemical and physical stability of ICG. This is manifested by lowering the chemical degradation rates under physiological conditions, as well as by improving the thermal- and photo-stability of the dye. A targeting moiety, F3–Cys peptide, was attached to the surface of the NPs, for selective delivery to specific cancer cell lines. The suitability of these NPs for optical imaging applications was demonstrated by performing fluorescence imaging on a rat gliosarcoma cell line (9L). We also present the photoacoustic response of the HSA–PAA NPs, used as imaging contrast agents, in the spectral window of 700 nm to 800 nm.