Superparamagnetic iron oxide nanoparticles (SPION) were coated with either Polyvinyl alcohol (PVA) or Vinyl alcohol/vinyl amine copolymer and further functionalized with the fluorochromes Cy3.5 or Texas Red. A colloidally stable suspension of nanoparticles was incubated on sheep synovial cells in vitro for 3, 24, 72, and 120 hours. Nanoparticle internalization into synoviocytes as well as biocompatibility was visualized using light, fluorescence and confocal microscopy and fluorochrome labeled cells were quantified by flow cytometry. Data were analyzed by ANOVA factorial tests. Amino-PVA-SPION alone was detectable in cytoplasmic endosome-like structures after 3 hours of incubation but resulted in early cell death after 24 hours. Although amino-PVA-Cy3.5- SPION and PVA-TexasRed-SPION were taken up more slowly and less intensely, both labeled more than 80% of the cells in culture, but did not significantly change cell morphology or vitality at any time of evaluation in comparison to control cells. Results indicate that functionalized amino PVA- coated SPION are biocompatible, were successfully internalized by synoviocytes and hold promise for future biomedical applications utilizing magnetic drug targeting in joint disease.