Magnetic particle imaging (MPI), using superparamagnetic nanoparticles as an imaging tracer, is touted as a quantitative biomedical imaging technology, but MPI signal properties have never been characterized for magnetic nanoparticles undergoing biodegradation. We show that MPI signal properties can increase or decrease as iron oxide nanoparticles degrade, depending on the nanoparticle formulation and nanocrystal size, and degradation rate and mechanism. Further, we show that long-term in vitro MPI experiments only roughly approximate long-term in vivo MPI signal properties. Further, we demonstrate for the first time, an environmentally sensitive MPI contrast mechanism opening the door to smart contrast paradigms in MPI.