Iron-oxide based contrast agents play an important role in magnetic resonance imaging (MRI) of labelled cells in vivo. Currently, a wide range of such contrast agents is available with sizes varying from several nanometers up to a few micrometers and consisting of single or multiple magnetic cores. Here, we evaluate the effectiveness of these different particles for labelling and imaging stem cells, using a mouse mesenchymal stem cell line to investigate intracellular uptake, retention and processing of nano- and microsized contrast agents. The effect of intracellular confinement on transverse relaxivity was measured by MRI at 7 T and in compliance with the principles of the '3Rs', the suitability of the contrast agents for MR-based cell tracking in vivo was tested using a chick embryo model. We show that for all particles tested, relaxivity was markedly reduced following cellular internalisation, indicating that contrast agent relaxivity in colloidal suspension does not accurately predict performance in MR-based cell tracking studies. Using a bimodal imaging approach comprising fluorescence and MRI, we demonstrate that labelled MSC remain viable following in vivo transplantation and can be tracked effectively using MRI. Importantly, our data suggest that larger particles might confer advantages for longer-term imaging.