Diamond magnetometry makes use of fluorescent defects in diamonds to convert magnetic resonance signals into fluorescence. Because optical photons can be detected much more sensitively, this technique currently holds several sensitivity world records for room temperature magnetic measurements. It is orders of magnitude more sensitive than conventional magnetic resonance imaging (MRI) for detecting magnetic resonances. Here, the use of diamond magnetometry to detect free radical production in single living cells with nanometer resolution is experimentally demonstrated. This measuring system is first optimized and calibrated with chemicals at known concentrations. These measurements serve as benchmarks for future experiments. While conventional MRI typically has millimeter resolution, measurements are performed on individual cells to detect nitric oxide signaling at the nanoscale, within 10-20 nm from the internalized particles localized with a diffraction limited optical resolution. This level of detail is inaccessible to the state-of-the-art techniques. Nitric oxide is detected and the dynamics of its production and inhibition in the intra- and extracellular environment are followed.