Ferrite particles coated with biocompatible phases can be used for hyperthermia treatment of cancer. We have synthesized substituted calcium hexaferrite, which is not stable on its own but is stabilized with small substitution of La. Hexaferrite of chemical composition (CaO) 0.75(La2O3)0.20(Fe2O 3)6 was prepared using citrate gel method. Hydroxyapatite was prepared by precipitating it from aqueous solution of Ca(NO 3)2 and (NH4)2HPO4 maintaining pH above 11. Four different methods were used for coating of hydroxyapatite on ferrite particles. SEM with EDX and X-ray diffraction analysis shows clear evidence of coating of hydroxyapatite on ferrite particles. These coated ferrite particles exhibited coercive field up to 2 kOe, which could be made useful for hysteresis heating in hyperthermia. Studies by culturing BHK-21 cells and WBC over the samples show evidence of biocompatibility. SEM micrographs and cell counts give clear indication of cell growth on the surface of the sample. Finally coated ferrite particle was implanted in Kasaulli mouse to test its biocompatibility. The magnetic properties and biocompatibility studies show that these hydroxyapatite coated ferrites could be useful for hyperthermia.