We report a new strategy for the preparation of monodisperse, water-soluble magnetic nanoparticles. Oleic acid-stabilized magnetic nanocrystals were prepared by the organic synthesis route proposed by Sun et al. (J. Am. Chem. Soc. 2004, 126, 273.), with size control obtained via seeded-mediated growth. The oleic groups initially present on the nanoparticle surfaces were replaced via ligand exchange reactions with various capping agents bearing reactive hydroxyl moieties. These hydroxyl groups were (i) exploited to initiate ring opening polymerization (ROP) of polylactic acid from the nanoparticle surfaces and (ii) esterified by acylation to permit the addition of alkyl halide moieties to transform the nanoparticle surfaces into macroinitiators for atom transfer radical polymerization (ATRP). By appropriate selection of the ligand properties, the nanoparticle surfaces can be polymerized in various solvents, providing an opportunity for the growth of a wide variety of water-soluble polymers and polylectrolyte brushes (both cationic and anionic) from the nanoparticle surfaces. The nanoparticles were characterized by Fourier transform infrared (FTIR) spectroscopy, thermogravimetric analysis (TGA), electron microscopy, and light scattering. Light scattering measurements indicate that the nanoparticles are mostly present as individual nonclustered units in water. With pH-responsive polymers grown on the nanoparticle surfaces, reversible aggregation of nanoparticles could be induced by suitable swings in the pH between the stable and unstable regions.