There is increasing interest in the use of magnetic resonance imaging (MRI) methods for tracking the fate of labelled cells in vivo post-implantation. The majority of studies have employed cell labels based on nanometer-sized ultrasmall dextran-coated iron oxide particles (USPIO), which are detected through signal hypointensity in T2-weighted images. Although sensitive to MR detection, these labels can be difficult to distinguish from other sources of signal loss in vivo and can be diluted by cell division. Recently, a micron-sized cell label has been described that is much more sensitive to MR detection and which allows detection of single labels in vivo. We show here that glial cells readily take up this label in culture and that the labelled Schwann cells can be detected in vivo by MRI following their implantation into a demyelinated lesion in the rat spinal cord. Signal loss due to the label is sufficiently great that the labelled cells can easily be distinguished from surrounding haemorrhage at the lesion site. Subsequent histological analysis of the lesion area showed that the transplanted cells were remyelinating the demyelinated axons, demonstrating that the labelled cells retained their biological function and that the majority of the label had remained within the transplanted cells.