This paper shows that Fe(OH) 2 precipitates were partially oxidized by H 2 O 2 to ultrafine Fe 3 O 4 powders about 8-10nm in the presence of surfactants. The magnetic fluid with various concentrations were prepared by using water and oil as carrier liquids, respectively. The phase analysis, morphology, ultrafine powder sizes and magnetic properties were measured by XRD, IR, TEM and vibrating sample magnetometer (VSM), respectively. The stability of the magnetic fluids were evaluated by testing the suspension percent. The influence of the amount of surfactants and the initial concentration of magnetic fluids on stability of the magnetic fluids was examined. The magnetization versus the concentration of magnetic fluids and carriers is also discussed.