In the current study cell labeling was performed with water-soluble gadolinium (Gd)-DTPA containing liposomes, to allow for cell tracking by MRI. Liposomes were used to assure a highly concentrated intracellular build up of Gd, aiming to overcome the relatively low MRI sensitivity of Gd (compared to T2 contrast agents). Liposomes were positively charged (cationic) to facilitate uptake by binding to anionic charges in the cell membrane of bone marrow-derived mesenchymal stem cells (MSCs). We determined the cellular Gd load by variations in labeling time (1, 4, and 24 h) and liposome concentration (125, 250, 500, 1000 μM lipid), closely monitoring effects on cell viability, proliferation rate, and differentiation ability. Labeling was both time and dose dependent. Labeling for 4 h was most efficient regarding the combination of processing time and final cellular Gd uptake. Labeling for 4 h with low-dose concentration (125 μM lipid, corresponding to 52 ± 3 μM Gd) yielded an intracellular load of 30 ± 2.5 pg Gd cell–1, without any effects on cell viability, proliferation, and cell differentiation. Gd liposomes, colabeled with fluorescent dyes, exhibited a prolonged cellular retention, with an endosomal distribution pattern. In vitro assay over 20 days demonstrated a drop in the average Gd load per cell, as a result of mitosis. However, there was no significant change in the sum of the Gd load in all daughter cells at endpoint (20 days), indicating an excellent cellular retention of Gd. MSCs labeled with Gd liposomes were imaged with MRI at both 1.5T and 3.0T, resulting in excellent visualization both in vitro and in vivo. Prolonged in vivo imaging of 500,000 Gd-labeled cells was possible for at least 2 weeks (3.0T). In conclusion, Gd-loaded cationic liposomes (125 μM lipid) are an excellent candidate to label cells, without detrimental effects on cell viability, proliferation, and differentiation, and can be visualized by MRI.