Objective: To study the efficacy and safety of the new magnetic nanoparticles to label bone marrow stromal cells (BMSCs) before and after transplanting them into hormone-induced osteonecrosis of femoral head (ONFH). Methods: A novel type of positively charged magnetic nanoparticles were used to label MSCs from hormone-induced animal models of ONFH, then the mRNA expression levels of Runx2 and PPAR gamma were determined with normal culture osteogenic-induced and adipogenic-induced culture. After the magnetically-labeledBMSCs were transplanted to treat ONFH, the concentration of fat, microvessels iron were measured by HE, fat, and Prussian blue staining. The protein expression levels of Runx2, PPAR gamma and CEBP alpha were determined by Western blotting. Results: There was no difference in the mRNA expression levels of Runx2 and PPAR gamma between labeled and control BMSCs in vitro. In vivo, the density of microvessels and the number of blood cells significantly increased while the fat vacuoles were significantly reduced in animals treated with BMSCs. Protein expression levels of CEBP alpha and PPAR gamma have significantly decreased while RUNX2 was significantly increased. No significant differences were found in the protein expression levels of CEBP alpha, PPAR gamma and RUNX2 comparing animals treated with BMSCs labeled or not labeled by nanoparticles. Conclusion: Magnetic nanoparticles do not affect the differentiation and treatment efficacy of BMSCs in vitro and in vivo. BMSCs labeled with magnetic nanoparticles can be used to treat ONFH because they can increase cartilage and vessel formation, and reduce adipogenesis.