In this study, lauric acid-coated, superparamagnetic, nanoparticle-based magnetic fluids of different ferrites (Fe3O4, MnFe 2O4, and CoFe2O4) were prepared and compared in terms of heating ability and biocompatibility to evaluate the feasibility of use in hyperthermia treatment of cancer. All the magnetic fluids prepared had particles of average sizes 9-11 nm. Heating ability of these magnetic fluids was evaluated by calorimetric measurement of specific absorption rate (SAR) at 300 kHz frequency and 15 kA/m field. Fe3O4 and MnFe2O4 showed higher SAR (120 and 97 W/g of ferrite, respectively) than CoFe2O4 (37 W/g of ferrite). In vitro study on BHK 21 cell lines showed dose-dependent cell viability for all the magnetic fluids. Threshold-biocompatible ferrite concentration for all the magnetic fluids was 0.1 mg/mL. Above 0.2 mg/mL, CoFe2O4 was more toxic than the other magnetic fluids. On intravenous injection of different doses (50, 200, and 400 mg/kg body weight) of magnetic fluids in mice, no significant changes in hematological and biochemical parameters were observed for Fe3O4 and MnFe2O4. With CoFe2O4, an increase in SGPT levels at a dose rate of 400 mg/kg body weight was observed, indicating its mild hepatotoxic effect. However, histology of different vital organs showed no pathological changes for all the three magnetic fluids. Further, long term in vivo evaluation of biocompatibility of the lauric acid-coated ferrites is warranted. This study shows that lauric acid-coated, superparamagnetic Fe3O4 and MnFe2O4 may be used for hyperthermia treatment and are to be preferred over CoFe2O4. © 2006 Wiley Periodicals, Inc.