OBJECTIVE Paramagnetic nanoparticles, mainly rare earth oxides and hydroxides, have been produced these last few years for use as MRI contrast agents. They could become an interesting alternative to iron oxide particles. However, their relaxation properties are not well understood. METHODS Magnetometry, (1)H and (2)H NMR relaxation results at different magnetic fields and electron paramagnetic resonance are used to investigate the relaxation induced by paramagnetic particles. When combined with computer simulations of transverse relaxation, they allow an accurate description of the relaxation induced by paramagnetic particles. RESULTS For gadolinium hydroxide particles, both T(1) and T(2) relaxation are due to a chemical exchange of protons between the particle surface and bulk water, called inner sphere relaxation. The inner sphere is also responsible for T(1) relaxation of dysprosium, holmium, terbium and erbium containing particles. However, for these latter compounds, T(2) relaxation is caused by water diffusion in the field inhomogeneities created by the magnetic particle, the outer-sphere relaxation mechanism. The different relaxation behaviors are caused by different electron relaxation times (estimated by electron paramagnetic resonance). CONCLUSIONS These findings may allow tailoring paramagnetic particles: ultrasmall gadolinium oxide and hydroxide particles for T(1) contrast agents, with shapes ensuring the highest surface-to-volume ratio. All the other compounds present interesting T(2) relaxation performance at high fields. These results are in agreement with computer simulations and theoretical predictions of the outer-sphere and static dephasing regime theories. The T(2) efficiency would be optimum for spherical particles of 40-50 nm radius.