Ultrathin transition metal chalcogenide (TMC) nanosheets with ultrahigh photothermal conversion efficiency (η) and excellent stability are strongly desired in the application of photothermal therapy (PTT). However, the current synthetic methods of ultrathin TMC nanosheets have issues in obtaining uniform morphology, good dispersion, and satisfactory PTT behavior. Herein, ultrathin nanosheets of CoFe-selenide (CFS) with a finely controlled structure were prepared via a topological structural transformation process from an ultrathin CoFe-layered double hydroxide (LDH) precursor, followed by surface modification with poly(ethylene glycol) (PEG). The as-prepared CFS-PEG nanosheets inherit the ultrathin morphology of CoFe-LDH and exhibit an outstanding photothermal performance with a η of 74.5%, which is the first rank level of reported two-dimensional (2D) TMC nanosheet materials. The CFS-PEG nanosheets possess a satisfactory photoacoustic (PA) imaging capability with an ultralow detection limit (5 ppm) and simultaneously superior T2 magnetic resonance imaging (MRI) performance with a large transverse MR relaxivity value (r2) of 347.7 mM-1 s-1. Moreover, in vitro and in vivo assays verify superior anticancer activity with a dramatic photoinduced cancer cell apoptosis and tumor ablation. Therefore, a successful paradigm is provided for rational design and preparation of ultrathin TMC nanosheets in this work, holding enormous potential in cancer theranostics.