We report the synthesis, characterization and relaxometric study of ferrofluids based on iron oxide, with potential for use as magnetic resonance imaging (MRI) contrast agents (CAs). The effect of different cost-effective, water-based surface modification approaches which can be easily scaled-up for the large scale synthesis of the ferrofluids has been investigated. Surface modification was achieved by silanization, and/or coating with non-toxic commercial dispersants (a lauric polysorbate and a block copolymer with pigment affinic groups, namely Tween 20 and Disperbyk 190) which were added after or during iron oxide nanoparticle synthesis. It was observed that all the materials synthesized functioned as negative contrast agents at physiological temperature and at frequencies covered by clinical imagers. The relaxometric properties of the magnetic nanoparticles were significantly improved after surface coating with stabilizers compared to the original iron oxide nanoparticles, with particular reference to the silica-coated magnetic nanoparticles. The results indicate that the optimization of the preparation of colloidal magnetic ferrofluids by surface modification is effective in the design of novel contrast agents for MRI by enabling better or more effective interaction between the coated iron oxide nanoparticles and protons present in their aqueous environment. (C) 2011 Elsevier Inc. All rights reserved.