Ultrafine magnetite particles of 4–10 nm were prepared in aqueous solutions of polyvinylalcohol (PVA) or PVA with partially exchanged carboxyl groups. The mode of agglomeration and dispersion of the particles were different depending on the properties of polymers in the solvent. The dispersion of magnetite particles prepared in PVA 1 wt.% aqueous solution at pH 13.8, was particularly stable. In contrast, those precipitated in an aqueous solution of PVA with 0.1 mol.% exchanged carboxyl groups agglomerated in the form of a chain-like cluster. The magnetic properties were sensitive to the state of agglomeration of the magnetite particles with adsorbed polymers. An increase of the coercive force after ball-milling was observed, due to the formation of the network structure.