On February 24, 2007, Jones married Barbadian sprinter and 2000 Olympic 100m bronze medalist Obadele Thompson. Their first child together, a son named Ahmir, was born in June 2007. She gave birth to daughter Eva-Marie on June 28, 2009.
At the Sydney Olympics, Jones finished with three gold medals (100 and 200 metre sprint, and 4x400m relay) and two bronze medals (long jump and 4x100m relay). However, she was later stripped of these medals after admitting that she had used performance-enhancing drugs. Her ex-husband Hunter, an Olympic shot-putter and confessed steroid user, testified under oath that he had seen her inject drugs into her stomach in the Olympic Village in Sydney. Jones vehemently denied using performance-enhancing drugs until her confession in 2007.
On October 5, 2007, Jones admitted to lying to federal agents under oath about her steroids use prior to the 2000 Summer Olympics and pleaded guilty at the US District Court for the Southern District of New York (in White Plains). She confessed to Judge Kenneth M. Karas that she had made false statements regarding the BALCO and a check-fraud case. She was released on her own recognizance but was required to surrender both her US and Belizean passports, pending sentencing in January. Although a maximum sentence of 5 years could be imposed, the prosecution recommended no more than 6 months as part of Jones's plea bargain.
After her admission, Jones held a press conference, where she finally publicly admitted taking steroids before the Sydney 2000 Summer Olympics and acknowledged that she had, in fact, lied when she previously denied steroid use in statements to the press, to various sports agencies, and to two grand juries. One was impaneled to investigate the BALCO "designer steroid" ring, and the other was impaneled to investigate a check fraud ring involving many of the same parties from the BALCO case. As a result of these admissions, Jones accepted a two-year suspension from track and field competition issued by USADA, and announced her retirement from track and field on October 5, 2007. She broke down in tears during the press conference as she tearfully apologized, saying "...with a great amount of shame...I stand before you and tell you that I have betrayed your trust...and you have the right to be angry with me... I have let my country down and I have let myself down."
On October 8, 2007, a source confirmed that Marion Jones surrendered her five medals from the 2000 Summer Olympics. On the same day, Ueberroth said that all the relay medals should be returned, and on April 10, 2008, the IOC voted to strip Jones' relay teammates of their medals as well, although this decision would successfully be appealed by seven of Jones' teammates and overturned in 2010.
On December 12, 2007, the IOC formally stripped Jones of all five Olympic medals dating back to September 2000, and banned her from attending the 2008 Summer Olympics in any capacity. The IOC action also officially disqualified Jones from her fifth-place finish in the Long Jump at the 2004 Summer Olympics.
On October 5, 2007, Jones pleaded guilty to making false statements to IRS Special Agent Jeff Novitzky leading the ongoing BALCO investigation in California. Jones claimed she had never taken performance-enhancing drugs. "That was a lie, your honor," she said from the defense table. The federal government, through grand juries, had been investigating steroid abuse since 2003.