Chitosan nanoparticles with magnetic properties can be potentially used as drug delivery carrier, separation materials. Different from the two-step preparation method of suspension cross-linking, a new method was proposed to in situ prepare magnetic chitosan/Fe3O4 composite nanoparticles with tiny water pools of water-in-oil microemulsion containing chitosan and ferrous salt as microreactors by adding the basic precipitant of NaOH into the microemulsion. The images of transmission electron microscope showed that the cubic-shape magnetic iron oxide particles were encapsulated by the spherical chitosan nanoparticles. The chitosan particle size varied from 10 nm to 80 nm with different molecular weight of chitosan. The saturated magnetization of pure Fe3O4 nanoparticles was as high as 120 emu/g, and the saturated magnetization of composite nanoparticles could reach 11.15 emu/g. Meanwhile, the nanoparticles showed the characteristics of superparamagnetism. We may adjust the magnetization of composite particles by changing the weight ratio of chitosan and Fe3O4. After stirring in water for 48 h the composite nanoparticles showed the same magnetization as the original ones, indicating high stability of the composite nanoparticles. (c) 2006 Elsevier B.V. All rights reserved.