Magnetic particle imaging (MPI) is an emerging imaging modality with promising applications in diagnostic imaging and guided therapy. The image quality in MPI is strongly dependent on the nature of its iron oxide nanoparticle-based tracers. The selection of potential MPI tracers is currently limited, and the underlying physics of tracer response is not yet fully understood. An in-depth understanding of the magnetic relaxation processes that govern MPI tracers, gained through concerted theoretical and experimental work, is crucial to the development of optimized MPI tracers. Although tailored tracers will lead to improvements in image quality, tailored relaxation may also be exploited for biomedical applications or more flexible image contrast, as in the recent demonstration of color MPI.