Magnetic particle imaging (MPI) is an emerging imaging modality that provides direct and quantitative mapping of iron oxide tracers. To achieve high sensitivity and good spatial resolution images, a magnetic nanoparticle with a higher contrast intensity needs to be developed. Currently, a majority of MPIs being developed for potential clinical application are composed of iron oxide nanoparticles with a spherical shape. In this project, we intend to report development of high-performance carbon (C) coated iron-cobalt (FeCo) nanoparticles (FeCo/C) and investigate their feasibility as a MPI agent. We have synthesized FeCo/C through a facile and simple method at mild temperature that is safe, easy, and up-scalable. We studied the structural and functional relationships and biocompatibility of this MPI agent in vitro. However, to enhance the aqueous solubility and biocompatibility, the surface of FeCo/C was modified with polyethylene glycol (PEG). We found that variation in the ratio of Fe and Co plays a vital role in their physical properties and functionality. In vitro imaging confirms that the FeCo/C nanoparticle has highly competitive MPI intensity compared to VivoTrax, a commercially available MPI agent. Confocal laser scanning microscopy imaging with Rhodamine B labeled FeCo/C displays cellular internalization by the A375 cancer cells. The in vitro toxicity analysis concludes that there is no significant toxicity of FeCo/C nanoparticles. Therefore, the newly developed MPI agent holds strong promise for biomedical imaging and could be further validated in vivo in small animals.