Superparamagnetic iron oxide nanoparticles (SPIO) are emerging as a novel probe for noninvasive cell tracking with magnetic resonance imaging (MRI) and have potential wide usage in medical research. In this study, we have developed a method using high-temperature hydrolysis of chelate metal alkoxide complexes to synthesize polyvinylpyrrolidone coated iron oxide nanoparticles (PVP-SPIO), as a biocompatible magnetic agent that can efficiently label mice islet beta-cells. The size, crystal structure and magnetic properties of the as-synthesized nanoparticles have been characterized. The newly synthesized PVP-SPIO with high stability, crystallinity and saturation magnetization can be efficiently internalized into beta-cells, without affecting viability and function. The imaging of 100 PVP-SPIO-labeled mice islets in the syngeneic renal subcapsular model of transplantation under a clinical 3.0 T MR imager showed high spatial resolution in vivo. These results indicated the great potential application of the PVP-SPIO as an MRI contrast agent for monitoring transplanted islet grafts in the clinical management of diabetes in the near future.