A contrast agent for optoacoustic imaging and laser therapy of early tumors is being developed based on gold nanocolloids strongly absorbing visible and near-infrared light. The optoacoustic signals obtained from gold nanospheres and gold nanorods solutions are studied. In the case of 100 nm nanospheres as an example, a sharp increase in the total area under the curve of the optoacoustic signal is observed when the laser fluence is increased beyond a threshold value of about 0.1 J/cm 2. The change in the optoacoustic signal profile is attributed to the formation of water vapor bubbles around heated nanoparticles, as evidenced via thermoacoustic microscopy experiments. It has been determined that, surprisingly, gold nanoparticles fail to generate detectable nanobubbles upon irradiation at the laser fluence of ~2 mJ/cm 2, which heats the nanoparticles up to 374°C, the critical temperature of water. Only when the estimated temperature of the particle reaches about 10,000°C, a marked increase of the optoacoustic pressure amplitude and a changed profile of the optoacoustic signals indicate nanobubble formation. A nanoparticle based contrast agent is the most effective if it can be activate by laser pulses with low fluence attainable in the depth of tissue. With this goal in mind, we develop targeting protocols that form clusters of gold nanocolloid in the target cells in order to lower the bubble formation threshold below the level of optical fluence allowed for safe laser illumination of skin. Experiments and modeling suggest that formation of clusters of nanocolloids may improve the sensitivity of optoacoustic imaging in the detection of early stage tumors.