The therapeutic potential of transplantation of embryonic stem cells (ESCs) in animal model of myocardial infarction has been consistently demonstrated. The development of superparamagnetic iron oxide (SPIO) nanoparticles labeling and cardiac magnetic resonance imaging (MRI) have been increasingly used to track the migration of transplanted cells in vivo allowing cell fate determination. However, the impact of SPIO- labeling on cell phenotype and cardiac differentiation capacity of ESCs remains unclear. In this study, we demonstrated that ESCs labeled with SPIO compared to their unlabeled counterparts had similar cardiogenic capacity, and SPIO-labeling did not affect calcium-handling property of ESC-derived cardiomyocytes. Moreover, transplantation of SPIO-labeled ESCs via direct intra-myocardial injection to infarct myocardium resulted in significant improvement in heart function. These findings demonstrated the feasibility of in vivo ESC tracking using SPIO-labeling and cardiac MRI without affecting the cardiac differentiation potential and functional properties of ESCs.