Magnetic nanoparticles (NPs) are emerging as promising candidates for the next generation of image contrast agents and their performance is largely dependent on physicochemical properties. In this paper, a new type of 'top-down' fabrication technique was developed to synthesize ultrasmall magnetic NPs as a contrast enhancer. In a detailed, home-made oxygen plasma generator, fragments of larger KMnF3 NPs (22 nm) were broken down into smaller (<5 nm) particles with enhanced hydrophilicity. As massive activated oxygen species were produced during the process, the plasma was able to severely etch the NPs, and vacuum UV light irradiated them heavily as well, leaving them with weak crystallinity, splitting them into ultrafine particles. Also their surface transformed from hydrophobic to hydrophilic by oxidizing the passivated ligand, evidenced by the spectroscopy and microscopy results. The fragmented NPs are characteristic of unprecedented high longitudinal relaxivity (r1 = 35.52 mM-1.s-1) and appropriate biocompatibility. In a healthy mouse, the ultrafine NPs did not exert observable toxicity, this was evaluated by histology of the main organs and hemogram analysis, including kidney and liver function analysis. More interestingly, the ultrasmall NPs had a very long circulation time, as its blood half-life was around 20 h. When applied as a contrast enhancer for MRI of the patient-derived tumor xenograft model, the accumulation of KMnF3 NPs within the tumor had an average of 12.13% ID per gram, which greatly shortened the relaxation time of the tumor. Therefore the control-to-noise ratio was significantly enhanced, relative to the same dosage of Gadopentetetic acid (Magvenist) (P < 0.001). Our primary results demonstrate that fragmentation of the NPs via our home-made oxygen plasma technique might be an effective route for fabricating ultrasmall NPs, and benefit their contrast effect when applied as MRI enhancers for clinical diagnosis of tumors.