In this manuscript, biological durability, cytotoxicity and MRI image contrast effect of chitosan modified magnetic nanoparticles were investigated. The result of durability study shows that the asprepared sample with average size of about 30 nm had a high stability under pH conditions in range of from 2 to 12 and at salt concentration in range of from 0 to 300 mM. The cytotoxicity testing indicates that the obtained Fe₃O₄@CS ferrofluid revealed a low cytotoxicity. After 48 h of test on the line of prostate tumor cells of Sarcoma 180, collected IC50 value was 178.5±22 (μg/ml), 7.5 to 27.9 times less cytotoxicity than that of reported ferromagnetic fluids. MRI data shows that the transverse relaxation rate (r2) of the ferrite nanoparticles was 130.32 (mM-1s-1), 2 and 1.44 times larger than that of the commercial products of Sinerem (AMI-227) and Ferumoxytol products, respectively. Invivo test in rabbit shows that the picture of body parts was clearly observed after the injection of the Fe₃O₄@CS ferrofluid. With these outstanding properties, this magnetic fluid based on the chitosan modified Fe₃O₄ nanoparticles had great potential for enhancing the image contrast in image diagnosis by MRI magnetic resonance imaging technique.