The labeling of stem cells with iron oxide nanoparticles is increasingly used to enable MRI cell tracking and magnetic cell manipulation, stimulating the fields of tissue engineering and cell therapy. However, the impact of magnetic labeling on stem-cell differentiation is still controversial. One compromising factor for successful differentiation may arise from early interactions of nanoparticles with cells during the labeling procedure. It is hypothesized that the lack of control over nanoparticle colloidal stability in biological media may lead to undesirable nanoparticle localization, overestimation of cellular uptake, misleading MRI cell tracking, and further impairment of differentiation. Herein a method is described for labeling mesenchymal stem cells (MSC), in which the physical state of citrate-coated nanoparticles (dispersed versus aggregated) can be kinetically tuned through electrostatic and magnetic triggers, as monitored by diffusion light scattering in the extracellular medium and by optical and electronic microscopy in cells. A set of statistical cell-by-cell measurements (flow cytometry, single-cell magnetophoresis, and high-resolution MRI cellular detection) is used to independently quantify the nanoparticle cell uptake and the effects of nanoparticle aggregation. Such aggregation confounds MRI cell detection as well as global iron quantification and has adverse effects on chondrogenetic differentiation. Magnetic labeling conditions with perfectly stable nanoparticles—suitable for obtaining differentiation-capable magnetic stem cells for use in cell therapy—are subsequently identified.