BACKGROUND AND PURPOSE OF THE STUDY: Carbon nanotubes (CNTs) are emerging drug and imaging carrier systems which show significant versatility. One of the extraordinary characteristics of CNTs as Magnetic Resonance Imaging (MRI) contrasting agent is the extremely large proton relaxivities when loaded with gadolinium ion (Gdn3+) clusters. METHODS: In this study equated Gdn3+ clusters were loaded in the sidewall defects of oxidized multiwalled (MW) CNTs. The amount of loaded gadolinium ion into the MWCNTs was quantified by inductively coupled plasma (ICP) method. To improve water solubility and biocompatibility of the system, the complexes were functionalized using diamine-terminated oligomeric poly (ethylene glycol) via a thermal reaction method. RESULTS: Gdn3+ loaded PEGylated oxidized CNTs (Gdn3+@CNTs-PEG) is freely soluble in water and stable in phosphate buffer saline having particle size of about 200 nm. Transmission electron microscopy (TEM) images clearly showed formation of PEGylated CNTs. MRI analysis showed that the prepared solution represents 10% more signal intensity even in half concentration of Gd3+ in comparison with commerciality available contrasting agent Magnevist®. In addition hydrophilic layer of PEG at the surface of CNTs could prepare stealth nanoparticles to escape RES. CONCLUSION: It was shown that Gdn3+@CNTs-PEG was capable to accumulate in tumors through enhanced permeability and retention effect. Moreover this system has a potential for early detection of diseases or tumors at the initial stages.