Magnetic particle imaging (MPI), introduced at the beginning of the twenty-first century, is emerging as a promising diagnostic tool in addition to the current repertoire of medical imaging modalities. Using superparamagnetic iron oxide nanoparticles (SPIOs), that are available for clinical use, MPI produces high contrast and highly sensitive tomographic images with absolute quantitation, no tissue attenuation at-depth, and there are no view limitations. The MPI signal is governed by the Brownian and Néel relaxation behavior of the particles. The relaxation time constants of these particles can be utilized to map information relating to the local microenvironment, such as viscosity and temperature. Proof-of-concept pre-clinical studies have shown favourable applications of MPI for better understanding the pathophysiology associated with vascular defects, tracking cell-based therapies and nanotheranostics. Functional imaging techniques using MPI will be useful for studying the pathology related to viscosity changes such as in vascular plaques and in determining cell viability of superparamagnetic iron oxide nanoparticle labeled cells. In this review article, an overview of MPI is provided with discussions mainly focusing on MPI tracers, applications of translational capabilities ranging from diagnostics to theranostics and finally outline a promising path towards clinical translation.