Surface properties, as well as inherent physicochemical properties, of the engineered nanomaterials play important roles in their interactions with the biological systems, which eventually affect their efficiency in diagnostic and therapeutic applications. Here we report a new class of MRI contrast agent based on milk casein protein-coated iron oxide nanoparticles (CNIOs) with a core size of 15 nm and hydrodynamic diameter ~30 nm. These CNIOs exhibited excellent water-solubility, colloidal stability, and biocompatibility. Importantly, CNIOs exhibited prominent T2 enhancing capability with a transverse relaxivity r2 of 273 mM(-1) s(-1) at 3 tesla. The transverse relaxivity is ~2.5-fold higher than that of iron oxide nanoparticles with the same core but an amphiphilic polymer coating. CNIOs showed pH-responsive properties, formed loose and soluble aggregates near the pI (pH ~4.0). The aggregates could be dissociated reversibly when the solution pH was adjusted away from the pI. The transverse relaxation property and MRI contrast enhancing effect of CNIOs remained unchanged in the pH range of 2.0-8.0. Further functionalization of CNIOs can be achieved via surface modification of the protein coating. Bioaffinitive ligands, such as a single chain fragment from the antibody of epidermal growth factor receptor (ScFvEGFR), could be readily conjugated onto the protein coating, enabling specific targeting to MDA-MB-231 breast cancer cells overexpressing EGFR. T2-weighted MRI of mice intravenously administered with CNIOs demonstrated strong contrast enhancement in the liver and spleen. These favorable properties suggest CNIOs as a class of biomarker targeted magnetic nanoparticles for MRI contrast enhancement and related biomedical applications.