We report a one-step method for facile and sustainable synthesis of magnetic iron oxide nanorods (or IONRs) with mean lengths ranging from 25 to 50 nm and mean diameters ranging from 5 to 8 nm. The prepared IONRs are highly stable in aqueous media and can be surface functionalized for biomarker-targeted applications. This synthetic strategy involves the reaction of iron(III) acetylacetonate with polyethyleneimine in the presence of oleylamine and phenyl ether, followed by thermal decomposition. Importantly, the length and diameter as well as the aspect ratio of the prepared IONRs can be controlled by modulating the reaction parameters. We show that the resultant IONRs exhibit stronger magnetic properties compared to those of the widely used spherical iron oxide nanoparticles (IONPs) at the same iron content. The increased magnetic properties are dependent on the aspect ratio, with the magnetic saturation gradually increasing from 10 to 75 emu g when increasing length of the IONRs, 5 nm in diameter, from 25 to 50 nm. The magnetic resonance imaging (MRI) contrast-enhancing effect, as measured in terms of the transverse relaxivity, r, increased from 670.6 to 905.5 mM s, when increasing the length from 25 to 50 nm. When applied to the immunomagnetic cell separation of the transferrin receptor (TfR)-overexpressed medulloblastoma cells using transferrin (Tf) as the targeting ligand, Tf-conjugated IONRs can capture 92 ± 3% of the targeted cells under a given condition (2.0 × 10 cells/mL, 0.2 mg Fe/mL concentration of magnetic materials, and 2.5 min of incubation time) compared to only 37 ± 2% when using the spherical IONPs, and 14 ± 2% when using commercially available magnetic beads, significantly improving the efficiency of separating the targeted cells.