Magnetite nanoparticles in the size range of 3.2-7.5 nm were synthesized in high yields under variable reaction conditions using high-temperature hydrolysis of the precursor iron(II) and iron(III) alkoxides in diethylene glycol solution. The average sizes of the particles were adjusted by changing the reaction temperature and time and by using a sequential growth technique. To obtain gamma-iron(III) oxide particles in the same range of sizes, magnetite particles were oxidized with dry oxygen in diethylene glycol at room temperature. The products were characterized by DLS, TEM, X-ray powder diffractometry, TGA, chemical analysis, and magnetic measurements. NMR r(1) and r(2) relaxivity measurements in water and diethylene glycol (for OH and CH2 protons) have shown a decrease in the r(2)/r(1) ratio with the particle size reduction, which correlates with the results of magnetic measurements on magnetite nanoparticles. Saturation magnetization of the oxidized particles was found to be 20% lower than that for Fe3O4 with the same particle size, but their r(1) relaxivities are similar. Because the oxidation of magnetite is spontaneous under ambient conditions, it was important to learn that the oxidation product has no disadvantages as compared to its precursor and therefore may be a better prospective imaging agent because of its chemical stability.