Hydrophobic iron oxide nanoparticles grafted with hydrophobic polymer chains of varying molecular weights and graft densities are synthesized to underpin the role of brush entanglement and dipolar forces on creating nanostructures. Grafting density on magnetic nanoparticles is controlled in grafting-to method by changing the concentration of functionalized polymer in solution. The grafting density and brush length have varied systemically to observe the changes in nanostructures. Bridging between grafted chains and dipolar forces become effective only at low grafting density and result in long chains of particles. We demonstrate experimentally that structural transition of magnetic nanoparticles is controlled with the balance between grafted chain entanglements and dipolar forces.