We have recently developed compact and water-soluble zwitterionic dopamine sulfonate (ZDS) ligand coated superparamagnetic iron oxide nanoparticles (SPIONs) for use in various biomedical applications. The defining characteristics of ZDS-coated SPIONs are small hydrodynamic diameters, low non-specific interactions with fetal bovine serum, the opportunity for specific labeling, and stability with respect to time, pH, and salinity. We report here on the magnetic characterization of ZDS-coated SPIONs and their in vitro and in vivo performance relative to non-specific interactions with HeLa cells and in mice, respectively. ZDS-coated SPIONs retained the superparamagnetism and saturation magnetization (M(s)) of as-synthesized hydrophobic SPIONs, with M(s) = 74 emu g(-1) [Fe]. Moreover, ZDS-coated SPIONs showed only small non-specific uptake into HeLa cancer cells in vitro and low non-specific binding to serum proteins in vivo in mice.