Magnetic iron oxide nanoparticles (MIONs) have attracted enormous attention due to their wide applications, including for magnetic separation, for magnetic hyperthermia, and as contrast agents for magnetic resonance imaging (MRI). This review article introduces the methods of synthesizing MIONs, and their application as MRI contrast agents. Currently, many methods have been reported for the synthesis of MIONs. Herein, we only focus on the liquid-based synthesis methods including aqueous phase methods and organic phase methods. In addition, the MIONs larger than 10 nm can be used as negative contrast agents and the recently emerged extremely small MIONs (ES-MIONs) smaller than 5 nm are potential positive contrast agents. In this review, we focus on the ES-MIONs because ES-MIONs avoid the disadvantages of MION-based T- and gadolinium chelate-based T-weighted contrast agents.