Liposomes containing high-spin Fe(III) coordination complexes were prepared towards the production of T1 MRI probes with improved relaxivity. The amphiphilic Fe(III) complexes were anchored into the liposome with two alkyl chains to give a coordination sphere containing mixed amide and hydroxypropyl pendant groups. The encapsulated complex contains a macrocyclic ligand with three phosphonate pendants, [Fe(NOTP)]3-, which was chosen for its good aqueous solubility. Four types of MRI probes were prepared including those with intraliposomal Fe(III) complex (LipoA) alone, amphiphilic Fe(III) complex (LipoB), both intraliposomal and amphiphilic complex (LipoC) or micelles formed with amphiphilic complex. Water proton relaxivities r1 and r2 were measured and compared to a small molecule macrocyclic Fe(III) complex containing similar donor groups. Micelles of the amphiphilic Fe(III) complex had proton relaxivity values (r1 = 2.6 mM-1 s-1) that were four times higher than the small hydrophilic analog. Liposomes with amphiphilic Fe(III) complex (LipoB) have a per iron relaxivity of 2.6 mM-1 s-1 at pH 7.2, 34 °C at 1.4 T whereas liposomes containing both amphiphilic and intraliposomal Fe(III) complexes (lipoC) have r1 of 0.58 mM-1 s-1 on a per iron basis consistent with quenching of the interior Fe(III) complex relaxivity. Liposomes containing only encapsulated [Fe(NOTP)]3- have a lowered r1 of 0.65 mM-1 s-1 per iron complex. Studies show that the biodistribution and clearance of the different types liposomal nanoparticles differ greatly. LipoB is a blood pool agent with a long circulation time whereas lipoC is cleared more rapidly through both renal and hepatobiliary pathways. These clearance differences are consistent with lower stability of LipoC compared to LipoB.