The present study describes the preparation and analysis of a highly concentrated hydrophobic oleic acid-coated magnetite gel. By contrast to conventional techniques to prepare magnetic fluids, herein the oleic acid was introduced as a reactant during the initial crystallization phase of magnetite that was obtained by the co-precipitation of Fe(II) and Fe(III) salts by addition of ammonium hydroxide. The resulting gelatinous hydrophobic magnetite was characterized in terms of morphology, particle size, magnetic properties, crystal structure, and hydrophobicity/hydrophilicity. This magnetic gel exhibited superparamagnetism with a saturation magnetization of 46.0emu/g at room temperature and could be well dispersed both in polar and nonpolar carrier liquids. This protocol produced highly concentrated hydrophobic magnetic gel for biopolymer encapsulations.