Despite the success in the use of superparamagnetic iron oxide nanoparticles (SPION) for various scientific applications, its potential in biomedical fields has not been exploited to its full potential. In this context, an in situ substitution of Mn2+ was performed in SPION and a series of ferrite particles, MnxFe1-xFe2O4 with a varying molar ratio of Mn2+ : Fe2+ where 'x' varies from 0-0.75. The ferrite particles obtained were further studied in MRI contrast applications and showed appreciable enhancement in their MRI contrast properties. Manganese substituted ferrite nanocrystals (MnIOs) were synthesized using a novel, one-step aqueous co-precipitation method based on the use of a combination of sodium hydroxide and trisodium citrate (TSC). This approach yielded the formation of highly crystalline, superparamagnetic MnIOs with good control over their size and bivalent Mn ion crystal substitution. The presence of a TSC hydrophilic layer on the surface facilitated easy dispersion of the materials in an aqueous media. Primary characterizations such as structural, chemical and magnetic properties demonstrated the successful formation of manganese substituted ferrite. More significantly, the MRI relaxivity of the MnIOs improved fourfold when compared to SPION crystals imparting high potential for use as an MRI contrast agent. Further, the cytocompatibility and blood compatibility evaluations demonstrated excellent cell morphological integrity even at high concentrations of nanoparticles supporting the non-toxic nature of nanoparticles. These results open new horizons for the design of biocompatible water dispersible ferrite nanoparticles with good relaxivity properties via a versatile and easily scalable co-precipitation route. © the Owner Societies 2015.