Stable aqueous ferrofluids consisting of superparamagnetic iron oxide particles with nanometer size were prepared by adding aqueous dextran solutions of ferric and ferrous chlorides to ammonium hydroxide. The growth of the core particles was shown to be inhibited by the presence of dextran. Procedures to increase the rate of reaction by varying reaction parameters also inhibited the core growth as long as supply of core material was kept constant. The core particles actually existed in the fluid as chain aggregates, the size of which became smaller with the concentration of dextran by a dense coating of the core particles. The aggregate size was also affected by supplying oxygen in the reaction bath and varying the initial total iron concentration, but it was kept fairly constant with the variation in the other reaction parameters.