Aqueous dispersions of iron oxide nanoparticles with a high initial magnetic susceptibility (xi) are of interest as contrast agents in electromagnetic tomography. Nanoclusters composed of iron oxide primary particles were formed by co-precipitation of Fe(II) and Fe(III) chlorides at alkaline conditions and high temperature of 95 degrees C. Two-step addition of citrate was used to produce large primary particles and then stabilize the nanoclusters. The size of the primary particles was tuned from 5 nm to 15 nm by varying the citrate/iron precursor ratio during the normal phase hydrolysis reaction, while the second iteration of citrate stabilized the nanoclusters with hydrodynamic diameters of 30-75 nm. The crystallinity of the iron oxide nanoparticles was promoted by annealing at 95 degrees C and systematically studied with Superconducting Quantum Interference Device (SQUID), Vibrating Sample Magnetometer (VSM), Transmission Electron Microscopy (TEM) and X-ray Diffraction (XRD). The dependence of xi was examined over a range of low volume fractions (0.005 < 0 < 0.02) to understand the magnetic behavior of dispersions. The xi of the dispersions increased markedly with the size and concentration of the constituent primary particles, reaching an unusually high value of 0.85 at 1.6% v/v for 15 nm primary particles, which is 2-3 times higher than that for typical commercial ferrofluids. The high chi(i) values are favored by the high crystallinity and the large magnetic diameter of 9.3 nm, indicating a relatively thin surface nonmagnetic layer where the spin orientations are disordered. (C) 2015 Published by Elsevier Inc.