Despite advances in surgery and drug discovery, brain tumors remain fatal diseases. Early detection and diagnosis of brain tumors is of great importance for improving treatment outcomes. Magnetic resonance imaging (MRI) is a prominent, clinically-relevant imaging modality because of its excellent tissue contrast resolution, direct multiplanar imaging and increased sensitivity to edema. MRI utility is further enhanced with the use of magnetic iron oxide nanoparticles, which can function as both a contrast agent for imaging and as a drug delivery vehicle for treating brain cancer. In this review, the principles of various imaging modalities for brain tumors are discussed with focus on monocrystalline iron oxide nanoparticle (MION)-based MRI contrast agents. A summary is given on the mechanism of contrast effect, magnetophoretic mobility and magnetic retention, and strategies to enhance tumor selectivity, increase spatial resolution and reduce nonspecific uptake of MION.