Superparamagnetic iron oxide nanoparticles (SPIONs) made using magnetite (Fe3O4) are among the various important nanosystems under active investigation for biological applications. Various characterization techniques are required to judge the quality and application worthiness of magnetic nanoparticles (NPs). Magnetite NPs were synthesized by thermal decomposition method using triethylene glycol and benzyl ether as solvents and oleic acid as surfactant with a narrow size distribution. Furthermore, magnesium oxide (MgO) is coated on these magnetite NPs to protect the magnetic nuclei from oxidation. Spherical shaped, uniformly sized, and well-dispersed NPs of \(\sim 8~\pm ~2\) nm were studied by field emission scanning electron microscopy and high-resolution transmission electron microscopy. Cation vacancies on the surface lead to the nonmagnetic Fe2O3 phase on the surface of Fe3O4 NPs. MgO coated Fe3O4 NPs prevented the oxidation on NP surface, which is shown through infrared, Raman and Mössbauer spectroscopy studies. Magnetization studies of oleic acid and MgO coated magnetite NPs are crucial to utilize them in biological applications. We have achieved a stable ferrofluid in nonpolar solvent using SPIONs with an average size of 8 nm for magnetic hyperthermia applications. © 2015 IEEE.