Nano-graphene oxide (nano-GO) is a new class of carbon based materials being proposed for biomedical applications due to its small size, intrinsic optical properties, large specific surface area, and easy to functionalize. To fully exploit nano-GO properties, a reproducible method for its production is of utmost importance. Herein we report, the study of the sequential fracture of GO sheets onto nano-GO with controllable lateral width, by a simple, and reproducible method based on a mechanism that we describe as a confined hot spot atomic fragmentation/reduction of GO promoted by ultrasonication. The chemical and structural changes on GO structure during the breakage were monitored by XPS, FTIR, Raman and HRTEM. We found that GO sheets starts breaking from the defects region and in a second phase through the disruption of carbon bonds while still maintaining crystalline carbon domains. The breaking of GO is accompanied by its own reduction, essentially by the elimination of carboxylic and carbonyl functional groups. Photoluminescence and photothermal studies using this nano-GO are also presented highlighting the potential of this nanomaterial as a unique imaging/therapy platform.