Malignant tumors are caused by uncontrolled multiplication of cells in the body. It is possible to stop the growth of atypical cells by overheating (hyperthermia). By the magnetization process of magnetite nanoparticles, energy is dissipated as heat (Joule effect), producing increase of temperature. This causes the rupture of cancer cells. In this work, magnetic nanoparticles were synthesized by coprecipitation method and coated by biocompatible material (chitosan or castor oil). The samples showed required characteristics of nanocrystallinity, superparamagnetism and biocompatibility. This was deduced from hysteresis curve, thermal analysis and X-ray Diffraction data. Thus, the nanocomposite exhibits excellent features for use in vivo. © (2014) Trans Tech Publications, Switzerland.