An efficient MRI T2-weighted contrast agent incorporating a potential liver targeting functionality was synthesized via the combination of superparamagnetic iron oxide (SPIO) nanoparticles with multiwalled carbon nanotubes (MWCNTs). Poly(diallyldimethylammonium chloride) (PDDA) was coated on the surface of acid treated MWCNTs via electrostatic interactions and SPIO nanoparticles modified with a potential targeting agent, lactose-glycine adduct (Lac-Gly), were subsequently immobilized on the surface of the PDDA-MWCNTs. A narrow magnetic hysteresis loop indicated that the product displayed superparamagnetism at room temperature which was further confirmed by ZFC (zero field cooling)/FC (field cooling) curves measured by SQUID. The multifunctional MWCNT-based magnetic nanocomposites showed low cytotoxicity in vitro to HEK293 and Huh7 cell lines. Enhanced T2 relaxivities were observed for the hybrid material (186 mM(-1) s(-1)) in comparison with the pure magnetic nanoparticles (92 mM(-1) s(-1)) due to the capacity of the MWCNTs to "carry" more nanoparticles as clusters. More importantly, after administration of the composite material to an in vivo liver cancer model in mice, a significant increase in tumor to liver contrast ratio (277%) was observed in T2 weighted magnetic resonance images.