Advances of nanotechnology have led to the development of nanomaterials with both potential diagnostic and therapeutic applications. Among them, superparamagnetic iron oxide (SPIO) nanoparticles have received particular attention. Over the past decade, various SPIOs with unique physicochemical and biological properties have been designed by modifying the particle structure, size and coating. This article reviews the recent advances in preparing SPIOs with novel properties, the way these physicochemical properties of SPIOs influence their interaction with cells, and the development of SPIOs in liver and lymph nodes magnetic resonance imaging (MRI) contrast. Cellular uptake of SPIO can be exploited in a variety of potential clinical applications, including stem cell and inflammation cell tracking and intra-cellular drug delivery to cancerous cells which offers higher intra-cellular concentration. When SPIOs are used as carrier vehicle, additional advantages can be achieved including magnetic targeting and hyperthermia options, as well as monitoring with MRI. Other potential applications of SPIO include magnetofection and gene delivery, targeted retention of labeled stem cells, sentinel lymph nodes mapping, and magnetic force targeting and cell orientation for tissue engineering.