Epoxy-based composites of ferrite nanoparticles (50 nm) with 3-glycidoxypropyl- (GPTMS), aminopropyl(APTMS), or methyl-silsesquioxane (MTMS) coatings are reported. The GPTMS coatings (30-nm thick) allowed uniform particle dispersion in the epoxy and prevented sedimentation of the nanoparticles, whereas the APTMS-coated particles formed agglomerates, leading to particle sedimentation. The particles with the thinnest coating (MTMS - 3 nm) agglomerated in the composites without sedimentation. The composites based on GPTMS-coated particles showed higher fracture toughness than the composites based on MTMS-coated particles. The uniformity and thickness of the coatings were related to alcohol composition of the coating media. Coating removal by a novel ultrasonic etching allowed precise determination of the effective ferrite content in the coated nanoparticles. A markedly lower coercivity for nanoparticles without coatings as compared with the nanoparticles with thicker coatings was observed. The saturation magnetization and the coercivity of the composites were independent of coating and casting procedures. POLYM. ENG. SCI., 51:862-874, 2011. (C) 2011 Society of Plastics Engineers