Adipose-derived stem cells (ADSCs) hold great potential in cartilage tissue engineering due to their multipotency and ease of availability. MRI is an effective and noninvasive imaging approach to track cells and observe new tissue regeneration. It is essential to find a compatible and efficient imaging reagent without affecting the stemness of ADSCs. Herein, we developed chitosan-modified iron oxide nanoparticles (IO-CS) as the contrast reagent with good cell compatibility and high cellular uptake efficiency and used IO-CS for ADSC intra-articular imaging in a rat osteoarthritis (OA) model. TEM demonstrated the great morphology and size distribution of IO-CS nanoparticles with the size of 17 nm. Magnetization (29.4 emu per g) and MRI tests confirmed ( of 184 mM s) the feasibility of IO-CS nanoparticles as an MRI contrast reagent. In addition, the IO-CS nanoparticles showed good cellular compatibility and high labeling efficiency as compared to the commercial agent ferumoxytol. Moreover, incorporation of IO-CS nanoparticles did not alter the adipogenic, osteogenic and chondrogenic differentiation ability of ADSCs. Furthermore, the MRI transverse maps showed a persistence time of the IO-CS nanoparticles in ADSCs of 6 days . Then, we investigated the imaging capability of the IO-CS nanoparticle-labeled ADSCs with MRI for 5 weeks. The histological studies demonstrated the intra-articular biodistribution of the IO-CS nanoparticles, including in the cartilage superficial layer, synovial sublining layer, periosteum and bone marrow cavity. They provided systemic distribution information of the ADSCs in the OA rat model. In summary, we developed an accessible and effective imaging reagent with good biocompatibility and maintenance of the stemness of ADSCs. This showed the potential translational application of IO-CS nanoparticles as an MRI reagent in cartilage tissue engineering.