Small iron oxide and Co-doped iron oxide nanoparticles (NPs) were synthesized in a commercial amphiphilic block copolymer, poly(ethylene oxide)-b-poly(methacrylic acid) (PEO68-b-PMAA(8)), in aqueous solutions. The structure and composition of the micelles containing guest molecules (metal salts) or NPs (metal oxides) were studied using transmission electron microscopy, dynamic light scattering, X-ray photoelectron spectroscopy, and X-ray powder diffraction. The enlarged micelle cores after incorporation of metal salts are believed to be formed by both PMAA blocks containing metal species and penetrating PEO chains. The nanoparticle size distributions in PEO68-b-PMAA(8) were determined using small-angle X-ray scattering (SAXS) in bulk. Two independent methods for SAXS data interpretation for comprehensive analysis of volume distributions of metal oxide NPs showed presence of both small particles and larger entities containing metal species which are ascribed to organization of block copolymer micelles in bulk. The magnetometry measurements revealed that the NPs are superparamagnetic and their characteristics depend on the method of the NP synthesis. The important advantage of the PEO68-b-PMAA(8) stabilized magnetic nanoparticles described in this paper is their remarkable solubility and stability in water and buffers.