Gadolinium‐based chelates are a mainstay of contrast agents for magnetic resonance imaging (MRI) in the clinic. However, their toxicity elicits severe side effects and the Food and Drug Administration has issued many warnings about their potential retention in patients’ bodies, which causes safety concerns. Iron oxide nanoparticles (IONPs) are a potentially attractive alternative, because of their nontoxic and biodegradable nature. Studies in developing IONPs as T1 contrast agents have generated promising results, but the complex, interrelated parameters influencing contrast enhancement make the development difficult, and IONPs suitable for T1 contrast enhancement have yet to make their way to clinical use. Here, the fundamental principles of MRI contrast agents are discussed, and the current status of MRI contrast agents is reviewed with a focus on the advantages and limitations of current T1 contrast agents and the potential of IONPs to serve as safe and improved alternative to gadolinium‐based chelates. The past advances and current challenges in developing IONPs as a T1 contrast agent from a materials science perspective are presented, and how each of the key material properties and environment variables affects the performance of IONPs is assessed. Finally, some potential approaches to develop high‐performance and clinically relevant T1 contrast agents are discussed.