Labeling of pancreatic islets with superparamagnetic iron oxide (SPIO) nanoparticles enables their post-transplant monitoring by magnetic resonance imaging (MRI). Although the nanoparticles are incorporated into islet cells in culture, little is known about their fate in vivo. We studied the morphology of labeled islets after transplantation, aiming to identify the MRI contrast particles and their relationship to transplantation outcomes. Rat islets labeled with the ferucarbotran were transplanted into the liver or under the kidney capsule of syngeneic and allogeneic rats. After in vivo MRI, morphology was studied by light, fluorescence and transmission electron microscopy. Morphology of syngeneic islets transplanted beneath the kidney capsule vs into the liver was similar. Iron particles were almost completely eliminated from the endocrine cells and remained located in host-derived macrophages surrounding the vital islets for the entire study period. In the allogeneic model, islets lost their function and were completely rejected within nine days following transplantation in both transplant models. However, intercellular transport of the SPIO particles and subsequent MRI findings was different in the liver and kidney. In the liver, the decreasing number of islet-related MRI spots corresponded with clearance of iron particles in rejected islets; in contrast, with renal transplants extensive iron deposits with a high effect on MRI signal persisted in phagocytic cells beneath the capsule. We conclude that MRI detection of the iron contrast agent correlates with islet survival and function in islet transplantation into the liver, while it does not correlate in the case of transplantation beneath the renal capsule.