Progress in synthesis technologies and advances in fundamental understanding of materials with low dimensionality has led to the birth of a new scientific field, nanoscience, and to strong expectations of multiple applications of nanomaterials. The physical properties of small particles are unique, bridging the gap between atoms and molecules, on one side, and bulk materials on the other side. The work presented in this thesis investigates the potential of using magnetic nanoparticles as the next generation of contrast agents for biomedical imaging. The focus is on gadolinium-based nanoparticles and cellular activity including the uptake, morphology and production of reactive oxygen species. Gd ion complexes, like Gd chelates, are used today in the clinic, worldwide. However, there is a need for novel agents, with improved contrast capabilities and increased biocompatibility. One avenue in their design is based on crystalline nanoparticles. It allows to reduce the total number of Gd ions needed for an examination. This can be done by nanotechnology, which allows one to improve and fine tune the physico-chemical properties on the nanomaterial in use, and to increase the number of Gd atoms at a specific site that interact with protons and thereby locally increase the signal. In the present work, synthesis, purification and surface modification of crystalline Gd2O3-based nanoparticles have been performed. The nanoparticles are selected on the basis of their physical properties, that is they show enhanced magnetic properties and therefore may be of high potential interest for applications as contrast agents. The main synthesis method of Gd2O3 nanoparticles in this work was the modified "polyol" route, followed by purification of as-synthesized DEG-Gd2O3 nanoparticles suspensions. In most cases the purification step involved dialysis of the nanoparticle samples. In this thesis, organosilane were chosen as an exchange agent for further functionalization. Moreover, several paths have been explored for modification of the nanoparticles, including Tb 3+ doping and capping with sorbitol. Biocompatibility of the newly designed nanoparticles is a prerequisite for their use in medical applications. Its evaluation is a complex process involving a wide range of biological phenomena. A promising path adopted in this work is to study of nanoparticle interactions with isolated blood cells. In this way one could screen nanomaterial prior to animal studies. The primary cell type considered in the thesis are polymorphonuclear neutrophils (PMN) which represent a type of the cells of human blood belonging to the granulocyte family of leukocytes. PMNs act as the first defense of the immune system against invading pathogens, which makes them valuable for studies of biocompatibility of newly synthesized nanoparticles. In addition, an immortalized murine alveolar macrophage cell line (MH-S), THP-1 cell line, and Ba/F3 murine bone marrow-derived cell line were considered to investigate the optimization of the cell uptake and to examine the ...