Stem cell implantation is increasingly viewed as a promising strategy for the treatment of many diseases. A key aspect of stem cell therapies is the ability to distinguish the implanted cells from the host tissue cells and to understand their fate. Ex vivo labeling of the stem cells combined with non-invasive real time imaging modalities such as magnetic resonance imaging (MRI) are highly advantageous for this purpose. Superparamagnetic iron oxide nanoparticles (SPIONs) are promising as a labeling agent but they have to be modified to increase uptake by stem cells in order to generate sufficient contrast from the unlabeled tissues. This review provides a summary of the methods for the synthesis of SPIONs, their properties, and strategies for their modification to increase the efficiency in labeling stem cells. The challenges faced in using SPIONs for stem cell tracking by MRI are also discussed.