Dispersions of sterically stabilized magnetite nanoparticles in polydimethylsiloxane (PDMS) carrier fluids have been prepared for potential biomedical applications. Trivinylsiloxy-terminated PDMS was functionalized with mercaptoacetic acid or mercaptosuccinic acid to afford PDMS stabilizers containing either three or six carboxylic acid groups, respectively, at one chain-end. Magnetite nanoparticles were synthesized by a chemical co-precipitation reaction of FeCl2 and FeCl3 with hydroxide at pH 9-10. Subsequently, the PDMS stabilizers were adsorbed onto the magnetite nanoparticle surfaces via the carboxylate groups in an interfacial reaction at an acidic pH. The complexes were characterized with transmission electron microscopy to establish an average particle diameter of 7.4 +/- SD 1.7 nm and approximately spherical shape. Complexes containing up to 67wt% magnetite were prepared using these PDMS stabilizers, resulting in maximum saturation specific magnetizations of similar to 50 emu g(-1). The polymer-magnetite nanoparticle complexes could be dispersed in PDMS oligomers to afford polysiloxane ferrofluids. Copyright (c) 2005 John Wiley D Sons, Ltd.