An essential component of developing successful neural stem cell (NSC)-based therapies involves the establishment of methodologies to noninvasively monitor grafted NSCs within brain tissues in real time. In this context, ex vivo labeling with ultrasmall superparamagnetic iron oxide (USPIO) particles has been shown to enable efficient tracking of transplanted NSCs via magnetic resonance imaging (MRI). However, whether and how USPIO labeling affects the intrinsic biology of NSCs is not thoroughly understood, and remains an active area of investigation. Here, we perform a comprehensive examination of rat NSC survival and regenerative function upon labeling with the USPIO, Molday ION Rhodamine B (MIRB), which allows for dual magnetic resonance and optical imaging. After optimization of labeling efficiency, two specific doses of MIRB (20 and 50 μg/mL) were chosen and were followed for the rest of the study. We observed that both MIRB doses supported the robust detection of NSCs, over an extended period of time in vitro and in vivo after transplantation into the striata of host rats, using MRI and post hoc fluorescence imaging. Both in culture and after neural transplantation, the higher 50 μg/mL MIRB dose significantly reduced the survival, proliferation, and differentiation rate of the NSCs. Interestingly, although the lower 20 μg/mL MIRB labeling did not produce overtly negative effects, it increased the proliferation and glial differentiation of the NSCs. Additionally, application of this dose also changed the morphological characteristics of neurons and glia produced after NSC differentiation. Importantly, the transplantation of NSCs labeled with either of the two MIRB doses upregulated the immune response in recipient animals. In particular, in animals receiving the 50 μg/mL MIRB-labeled NSCs, this immune response consisted of an increased number of CD68(+)-activated microglia, which appeared to have phagocytosed MIRB particles and cells contributing to an exaggerated MRI signal dropout in the animals. Overall, these results indicate that although USPIO particles, such as MIRB, may have advantageous labeling and magnetic resonance-sensitive features for NSC tracking, a further examination of their effects might be necessary before they can be used in clinical scenarios of cell-based transplantation.