An amphiphilic polymer, alkylated branched polyethylenimine (N-Alkyl-PEI), is synthesized and used for stabilization of hydrophobic superparamagnetic iron oxide (SPIO) nanocrystals in aqueous phase. Such composite particles are monodisperse without aggregation in physiological buffer as verified by dynamic light scattering (DLS) and transmission electron microscopy (TEM). The nanocomposite system is capable of binding and delivering plasmid DNA for gene transfection while maintaining magnetic properties and biocompatibility. Transfection of cells showed that N-Alkyl-PEI2k stabilized magnetite nanoparticles were most effective in gene transfection comparing to unmodified PEI2k and PEI25k agents. Obvious MR signal darkening of transfected cells was observed under a clinical 3T MRI scanner. This multifunctional nanocomposite system provides a safe and efficient method for gene delivery with non-invasive imaging monitoring capability.