Organic-encapsulated Fe3O4 magnetic microspheres (MMS) were synthesized and used to prepare PLLA (Poly (L-lactic acid))/MMS composites. The effects of organic encapsulation on the mechanical, thermal, and magnetic properties of the composites were investigated. When compared with the PLLA/Fe3O4 composite, the elongation ratio of the PLLA/MMS composite improved significantly (by nearly 300%). Scanning electron microscope (SEM) images of the fracture morphology revealed an interesting "silking" phenomenon within the PLLA/MMS composite, which explains the greatly improved toughness. The decreased crystallinity and increased thermal stability of the PLLA/MMS composite suggest the existence of strong interacting forces between the PLLA molecules and the organic layer of the MMS particles, thereby limiting the mobility of the macromolecular chains. A study of the composites' magnetic properties indicated that the saturation magnetization was determined by the relative Fe3O4 content in the matrix, but not the types of the filling particles. POLYM. ENG. SCI., 50:215-221, 2010. (C) 2009 Society of Plastics Engineers