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Multicellular spheroids are an established system for three-dimensional cell culture. Spheroids are typically generated using hanging drop or non-adherent culture; however, an emerging technique is to use magnetic levitation. Herein, mesenchymal stem cell spheroids were generated using magnetic nanoparticles and subsequently cultured within a type I collagen gel, with a view towards developing a bone marrow niche environment. Cells were loaded with magnetic nanoparticles, and suspended beneath an external magnet, inducing self-assembly of multicellular spheroids. Cells in spheroids were viable and compared to corresponding monolayer controls, maintained stem cell phenotype and were quiescent. Interestingly, core spheroid necrosis was not observed, even with increasing spheroid size, in contrast to other commonly used spheroid systems. This mesenchymal stem cell spheroid culture presents a potential platform for modelling in vitro bone marrow stem cell niches, elucidating interactions between cells, as well as a useful model for drug delivery studies. [ABSTRACT FROM AUTHOR]