Cell therapy is targeted at many organs, but locally or systemically delivered cells are shortly able to survive resulting from the immune/inflammation reactions and irregular cell targeting. Here we explore the multimodal nanoparticle having anti-inflammation and magnetic guidance for successful cell transplantation. We design magnetic resonance (MR)-active glycyrrhizin-chitosan coated superparamagnetic iron oxide nanoparticle (SPIO@Chitosan-GL) to inhibit release of inflammatory damage-associated molecular pattern (DAMP) protein and to offer noninvasive monitoring after intrahepatic transplantation of pancreatic islets and mesenchymal stem cell (MSC) spheroids. Intracellular delivered SPIO@Chitosan-GL is not cytotoxic to pancreatic islets and MSC spheroids and attenuate DAMP release from them. Also, therapeutic cells labeled with SPIO@Chitosan-GL are magnetically localized to the intended lobe of liver during transplantation procedure. If necessary, partial hepatectomy can be performed to remove the localized therapeutic cells for protection of the remaining liver lobes from systemic inflammation. Therapeutically, the cells selectively localized in the liver can treat blood glucose in diabetic mice to normal levels with DAMP modulation, and are visualized using in vivo MR imaging for over 4 weeks. Collectively, DAMP-modulating SPIO@Chitosan-GL can be used in multimodal nanomedince for attenuating the inflammation reaction by transplanted cells and for noninvasively long-term monitoring of transplanted cells.