Magnetic nanoparticles were synthesized by using the sonochemical method with oleic acid as a surfactant. The average size of the magnetite nanoparticles was controlled by varying the ratio R=[$H_2O$]/[surfactant] in the range of 2 to 9 nm. To prepare chitosan-coated magnetite nanoparticles, chitosan solution was added to a magnetite colloid suspension under ultrasonication at room temperature for 20 min. The chitosan-coated magnetite nanoparticles were characterized by several techniques. Atomic force microscopy (AFM) was used to image the chitosan-coated nanoparticles. Magnetic hysteresis measurement was performed by using a superconducting quantum interference device (SQUID) magnetometer to investigate the magnetic properties of the magnetite nanoparticles and the chitosan-coated magnetite nanoparticles. The SQUID measurements revealed the superparamagnetism of both nanoparticles. The T1- and T2-weighted MR images of these chitosan-coated magnetite colloidal suspensions were obtained with a 4.7 T magnetic resonance imaging (MRI) system. The chitosancoated magnetite colloidal suspensions exhibited enhanced MRI contrasts in vitro.