Crystalline silicon (Si) nanoparticles (NPs) doped with iron (Fe) in the range from 0.02 to 2.5 at.% were prepared by plasma-ablative synthesis and were investigated by means of the transmission electron microscopy, X-ray diffraction (XRD), dynamic light scattering (DLS), infrared spectroscopy and nuclear magnetic resonance relaxometry. While the nanocrystal size in Si:Fe NPs did not depend significantly on Fe content, the hydrodynamic diameter of NPs in aqueous suspensions increases from 50 to 180[Formula: see text]nm. Both the transverse and longitudinal proton relaxation time were found to decrease in the prepared suspensions of Si:Fe NPs. Maximal shortening of the transverse relaxion was observed for Si:Fe NPs with 0.2 at.% of Fe and the relaxation rate was almost linearly proportional to the NP concentration. Both these findings and in vivo tests indicate that Si:Fe NPs are promising for biomedical applications in magnetic resonance imaging (MRI) and therapy of cancer.