We report a biocompatible polysiloxane containing amphiphilic diblock copolymer, poly(ethylene oxide)-block-poly(gamma-methacryloxypropyltrimethoxysilane) (PEO-b-PgammaMPS), for coating and stabilizing nanoparticles for biomedical applications. Such an amphiphilic diblock copolymer that comprises both a hydrophobic segment with "surface anchoring moiety" (silane group) and a hydrophilic segment with PEO (M(n) = 5000 g/mol) was obtained by the reversible addition-fragmentation chain transfer (RAFT) polymerization using the PEO macromolecular chain transfer agent. When used for coating paramagnetic iron oxide nanoparticles (IONPs), copolymers were mixed with hydrophobic oleic acid coated core size uniformed IONPs (D = 13 nm) in cosolvent tetrahydrofuran. After being aged over a period of time, resulting monodispersed IONPs can be transferred into aqueous medium. With proper PgammaMPS block length (M(n) = 10 000 g/mol), polysiloxane containing diblock copolymers formed a thin layer of coating (approximately 3 nm) around monocrystalline nanoparticles as measured by transmission electron microscopy (TEM). Magnetic resonance imaging (MRI) experiments showed excellent T(2) weighted contrast effect from coated IONPs with a transverse relaxivity r(2) = 98.6 mM(-1) s(-1) (at 1.5 T). Such thin coating layer has little effect on the relaxivity when compared to that of IONPs coated with conventional amphiphilic copolymer. Polysiloxane containing diblock copolymer coated IONPs are stable without aggregation or binding to proteins in serum when incubated for 24 h in culture medium containing 10% serum. Furthermore, a much lower level of intracellular uptake by macrophage cells was observed with polysiloxane containing diblock copolymers coated IONPs, suggesting the reduction of nonspecific cell uptakes and antibiofouling effect.