Ligand-conjugated microparticles of iron oxide (MPIO) have the potential to provide high sensitivity contrast for molecular magnetic resonance imaging (MRI). However, the accumulation and persistence of non-biodegradable micron-sized particles in liver and spleen precludes their clinical use and limits the translational potential of MPIO-based contrast agents. Here we show that ligand-targeted MPIO derived from multiple iron oxide nanoparticles may be coupled covalently through peptide linkers that are designed to be cleaved by intracellular macrophage proteases. The synthesized particles possess potential characteristics for targeted MRI contrast agents, including high relaxivity, unappreciable sedimentation, clearance from circulation and no overt toxicity. Importantly, we demonstrate that these particles are rapidly degraded both in vitro and in vivo, and that the targeted probes can be used for detection of inflammation in vivo using MRI. This approach provides a platform for molecular MRI contrast agents that is potentially more suitable for translation to humans.