Superparamagnetic iron oxide particles have proven useful for cell tracking applications by monitoring cell transplantation and migration in living organisms. However, one perceived drawback is that these particles cause dark contrast in MRI, sometimes yielding confusion with other biological phenomena, which also yield dark contrast. To that end, researchers have investigated the use of gadolinium oxide (Gd2O3) based contrast agents for MRI-based cell tracking, as Gd2O3 has favorable r1 molar relaxivity. We synthesized Gd2O3 nanocrystals and encapsulated them within PLGA matrices to form approximatley to 150 nm nanoparticles. r1 was 1.9 mM(-1) sec(-1) and r2 was 8.4 mM(-1) sec(-1). Cell labeling with particles was well tolerated by cells except at very high doses. MRI of labeled cells showed that labeled cells could achieve both R1 and R2 enhancements due to the internalized particles. R2 enhancements were approximately to twice that of R1 enhancements suggesting the use of very short echo times when using Gd2O3 based contrast agents for MRI-based cell tracking.