This study demonstrates a new candidate for targeted magnetic resonance imaging (MRI) contrast agent (CA) based on holmium nanoparticles. MRI is one of the most powerful diagnostic tools in cancer diagnosis which enables anatomical images of soft tissues with a resolution much higher than other imaging techniques. Holmium has been known for its high magnetic moment which can improve MRI signals as T2-MRI CA. This research focuses on modifying folic acid (FA) on the surface of polyethyelene glycol coated- holmium nanoparticles to deliver holmium nanoparticles selectively to the cancer-overexpressed FA receptors, such as cervical cancer. Their preparation and characterization with several analytical instruments such as transmission electron microscopy to observe their shape and size, thermal gravimetric analysis, ultraviolet and infrared spectroscopies to investigate the FA and polyethylene glycol molecules on nanoparticles are also included. From the results, morphology images show a narrow size distribution below 20 nm after the functionalization of polyethyelene glycol-coated holmium nanoparticles with and without FA modification. Based on ultraviolet and infrared spectrum analysis, the presences of FA and polyethylene glycol molecules on nanoparticles were also identified. The typical peaks of FA at around 280 and 360 nm were found on FA-modified nanoparticles spectras. In addition, infrared spectroscopy results at around 2800 cm^–1 originated from polyethylene glycol molecules on nanoparticles was also observed. Furthermore, based on a preliminary cytotoxicity study, there are no significant differences between polyethylene glycol-coated nanoparticles modified with and without FA in terms of toxicity. Based on these results, FA-modified holmium nanoparticles showed promising preliminary results to be utilized as targeted MRI CA for diagnostic purposes.