We report the fabrication of magnetic particles comprised of clusters of iron oxide nanoparticles, 7.4 nm mean diameter, stabilized by a biocompatible, amphiphilic diblock copolymer, poly(ethylene oxide-b-D,L-lactide). Particles with quantitative incorporation of up to 40 wt % iron oxide and hydrodynamic sizes in the range of 80-170 nm were prepared. The particles consist of hydrophobically modified iron oxide nanoparticles within the core-forming polylactide block with the poly(ethylene oxide) forming a corona to afford aqueous dispersibility. The transverse relaxivities (r(2)) increased with average particle size and exceeded 200 s(-1) mM Fe-1 at 1.4 T and 37 degrees C for iron oxide loadings above 30 wt %. These experimental relaxivities typically agreed to within 15% with the values predicted using analytical models of transverse relaxivity and cluster (particle core) size distributions derived from cryo-TEM measurements. Our results show that the theoretical models can be used for the rational design of biocompatible MRI contrast agents with tailored compositions and size distributions.