Magnetic nanofluids consisting of fluids suspended with magnetic materials are of current interest and have potential applications in both energy related and biomedical fields. In this paper, we present a novel magnetic nanofluid obtained by dispersing silicon dioxide (SiO2) coated on magnetite (Fe3O4) particle decorated multiwalled carbon nanotubes (MWNTs) (Fe3O4@SiO2/MWNTs) in de-ionized water. As compared to a magnetite decorated MWNT based nanofluid, the present system shows better stability and thermal properties without the use of any surfactants. Fe3O4/MWNTs and Fe3O 4@SiO2/MWNTs have been synthesized via a simple chemical reduction technique and dispersed in de-ionized water via ultrasonication. Dispersed de-ionized water based nanofluids containing Fe3O 4/MWNTs with surfactant and Fe3O4@SiO 2/MWNTs without surfactant show a thermal conductivity enhancement of 20 and 24.5, respectively, for a volume fraction of 0.03 in the presence of magnetic field. The enhancement in the thermal conductivity has been observed for other volume fractions also. The increase in the thermal conductivity of these nanofluids can be attributed to the chain formation of magnetic nanomaterials in the base fluid in the presence of magnetic field. © 2011 American Institute of Physics.