Super paramagnetic magnetite nanoparticles are of great interest due to their potential biomedical applications. In the present investigation,Fe₃O₄ magnetic nanoparticles were   prepared by alkaline precipitation using ferrous chloride as the sole source. An amphiphilic polyelectrolyte with the property of bio compatibility and functional carboxyl groups was used as a stabilizer to prepare a well-dispersed suspension of super paramagnetic Fe₃O₄ nanoparticles. The final material composedofFe₃O₄ core and chitosan (CH)shell was produced. The amino groups of CH coated on Fe₃O₄ nanoparticles  were further cross linked using glutaraldehyde (GLD) for stable coating. FTIR spectra, XPS and TGA confirmed the coating of CH/GLD on the surface of Fe₃O4 nanoparticles. XRD patterns indicate the pure phase Fe₃O₄ with a spinel structure. The nanoparticles were super paramagnetic at room temperature with saturation magnetization values for bare and coated nanoparticles which were 51.68 emu/g and 48.60 emu/g, respectively. Zeta potential values showed higher colloidal stability of coated nanoparticles than the bare one. Cytotoxicity study upto 2mgm L^_1 concentration showed no drastic change in cell viability of nanoparticles after coating. Also, coated nanoparticles showed increased SAR value, making them suitable for hyperthermia therapy application.