PURPOSE: To study contrast-enhanced MRI guided photodynamic therapy with a pegylated bifunctional polymer conjugate containing an MRI contrast agent and a photosensitizer for minimally invasive image-guided cancer treatment. METHODS: Pegylated and non-pegylated poly-(L-glutamic acid) conjugates containing mesochlorin e6, a photosensitizer, and Gd(III)-DO3A, an MRI contrast agent, were synthesized. The effect of pegylation on the biodistribution and tumor targeting was non-invasively visualized in mice bearing MDA-MB-231 tumor xenografts with MRI. MRI-guided photodynamic therapy was carried out in the tumor bearing mice. Tumor response to photodynamic therapy was evaluated by dynamic contrast enhanced MRI and histological analysis. RESULTS: The pegylated conjugate had longer blood circulation, lower liver uptake and higher tumor accumulation than the non-pegylated conjugate as shown by MRI. Site-directed laser irradiation of tumors resulted in higher therapeutic efficacy for the pegylated conjugate than the non-pegylated conjugate. Moreover, animals treated with photodynamic therapy showed reduced vascular permeability on DCE-MRI and decreased microvessel density in histological analysis. CONCLUSIONS: Pegylation of the polymer bifunctional conjugates reduced non-specific liver uptake and increased tumor uptake, resulting in significant tumor contrast enhancement and high therapeutic efficacy. The pegylated poly(L-glutamic acid) bifunctional conjugate is promising for contrast enhanced MRI guided photodynamic therapy in cancer treatment.