MR-labeling of endogenous neural progenitor cells (NPCs) to follow up cellular migration with in vivo magnetic resonance imaging (MRI) is a very promising tool in the rapidly growing field of cellular imaging. To date, most of the in situ labeling work has been performed using micron-sized iron oxide particles. In this work magnetoliposomes (MLs), i.e. ultrasmall superparamagnetic iron oxide cores (USPIOs), each individually coated by a phospholipid bilayer, were used as the MR contrast agent. One of the main advantages of MLs is that the phospholipid bilayer allows easy modification of the surface, which creates the opportunity to construct a wide range of MLs optimized for specific biomedical applications. We have investigated the ability of MLs to label endogenous NPCs after direct injection into the adult mouse brain. Whereas MRI revealed contrast relocation towards the olfactory bulb, our data strongly imply that this relocation is independent of the migration of endogenous NPCs but represents background migration of MLs along a white matter tract. Our findings suggest that the small size of USPIOs/MLs intrinsically limits their potential for in situ labeling of NPCs. Copyright © 2010 John Wiley & Sons, Ltd.