Magnetic nanoparticles (MNPs) have been proposed for targeted or embolization therapeutics. How MNP retention occurs in circulation may critically determine local hemodynamics, tissue distribution of MNPs, and the therapeutic effects. We attempted to establish a microcirculation model to study the magnetic capture of MNPs in small vessels and to determine the factors affecting MNP retention. Two-dimensional hemodynamic changes in response to magnet-induced MNP retention in the microvessels of the cremaster muscle in vivo were observed in a real-time manner using a laser speckle imaging technique. Changes in tissue perfusion of the cremaster muscle appeared to be closely correlated with the location of the magnet placement underneath the muscle in response to intra-arterial administration of dextran-coated MNPs. Magnet-related retention was observed along the edge of the magnet, as corroborated by the results of histology analysis and microcomputed tomography. In these preparations, tissue iron content almost doubled, as revealed by inductively coupled plasma optical emission spectroscopy. In addition, MNP retention was associated with reduced downstream flow in a dose-dependent manner. Dissipation of MNPs (5 mg/kg) occurred shortly after removal of the magnet, which was associated with significant recovery of tissue flow. However, MNP dissipation did not easily occur after administration of a higher MNP dose (10 mg/kg) or prolonged exposure to the magnetic field. An ultrasound after removal of the magnet may induce the partial dispersion of MNPs and thus partially improve hemodynamics. In conclusion, our results revealed the important correlation of local MNP retention and hemodynamic changes in microcirculation, which can be crucial in the application of MNPs for effective targeted therapeutics.