Ultrafine sub-5 nm magnetic iron oxide nanoparticles coated with oligosaccharides (SIO) with dual T1-T2 weighted contrast enhancing effect and fast clearance has been developed as magnetic resonance imaging (MRI) contrast agent. Excellent water solubility, biocompatibility and high stability of such sub-5 nm SIO nanoparticles were achieved by using the "in-situ polymerization" coating method, which enables glucose forming oligosaccharides directly on the surface of hydrophobic iron oxide nanocrystals. Reported ultrafine SIO nanoparticles exhibit a longitudinal relaxivity (r1) of 4.1 mM-1s-1 and a r1/r2 ratio of 0.25 at 3 T (clinical field strength), rendering improved T1 or "brighter" contrast enhancement in T1-weighted MRI in addition to typical T2 or "darkening" contrast of conventional iron oxide nanoparticles. Such dual contrast effect can be demonstrated in liver imaging with T2 "darkening" contrast in the liver parenchyma but T1 "bright" contrast in the hepatic vasculature. More importantly, this new class of ultrafine sub-5 nm iron oxide nanoparticles showed much faster body clearance than those with larger sizes, promising better safety for clinical applications.