Stem cell transplantation is a promising therapeutic strategy for acute or chronic ischemic cardiomyopathy. A major limitation to efficacy in cell transplantation is the low efficiency of retention and engraftment, due at least in part to significant early "wash-out" of cells from coronary blood flow and heart contraction. We sought to enhance cell retention and engraftment by magnetic targeting. Human cardiosphere-derived stem cells (hCDCs) were labeled with FDA-approved ferumoxytol nanoparticles Feraheme(®) (F) in the presence of heparin (H) and protamine (P). FHP labeling is nontoxic to hCDCs. FHP-labeled rat CDCs (FHP-rCDCs) were intracoronarily infused into syngeneic rats, with and without magnetic targeting. Magnetic resonance imaging, fluorescence imaging, and quantitative PCR revealed magnetic targeting increased cardiac retention of transplanted FHP-rCDCs. Neither infusion of FHP-rCDCs nor magnetic targeting exacerbated cardiac inflammation or caused iron overload. The augmentation of acute cell retention translated into more attenuated left ventricular remodeling and greater therapeutic benefit (ejection fraction) 3 weeks after treatment. Histology revealed enhanced cell engraftment and angiogenesis in hearts from the magnetic targeting group. FHP labeling is safe to cardiac stem cells and facilitates magnetically-targeted stem cell delivery into the heart which leads to augmented cell engraftment and therapeutic benefit.