In vitro cytocompatibility and cellular interactions of lauric acid and dextran-coated magnetite nanoparticles were evaluated with two different cell lines (mouse fibroblast and human cervical carcinoma). Lauric acid-coated magnetite nanoparticles were less cytocompatible than dextran-coated magnetite nanoparticles and cellular uptake of lauric acid-coated magnetic nanoparticles was more than that of dextran-coated magnetite nanoparticles. Lesser cytocompatibility and higher uptake of lauric acid-coated magnetite nanoparticles as compared to dextran-coated magnetic nanoparticles may be due to different cellular interactions by coating material. Thus, coating plays an important role in modulation of biocompatibility and cellular interaction of magnetic nanoparticles. © 2006 Elsevier B.V. All rights reserved.