The present application discloses treating water insoluble nanoparticles, particularly nanoparticles of metals and metal compounds which find utility in diagnostic imaging such as MR and X-ray imaging, with an alpha-hydroxyphosphonic acid conjugate with a hydrophilic moiety to render the nanoparticles sufficiently hydrophilic to find utility in diagnostic imaging. Among the modified hydrophilic nanoparticles disclosed are those in which the hydrophilic moieties of the modifying conjugate are ethylene oxide based polymers and copolymers and zwitterions and the nanoparticles are composed of transition metal oxides such as superparamagnetic iron oxide and tantalum oxide. Disclosed are nanoparticles which are sufficiently hydrophilic to form stable aqueous colloidal suspensions. Also disclosed is diagnostic imaging such as MR and X-ray using the modified hydrophilic nanoparticles as contrast agents.