Fe3O4 magnetic particles were synthesize by chemical co precipitation. Sodium oleate and poly(ethyleneglycol) 4000 were used as bilayer surfactants toenvelope the ultra fine Fe3O4 particles. Then stabilized water base magnetic fluid was obtained. Experiments indicated that surfactants and pH value of the solution had great effect on the stability and size of the magnetic fluid when Fe3O4 particles were synthesized and enveloped. It was the first time to employ this method to prepare magnetic fluid. Using laser diffraction particle size analyzer we found that the average diameter of magnetic fluid was lessen than 84 nanometer. Its magnetization was measured on magnetic balance and the result amounted to 3.84×103A·m-1. Further more, XRD and IR analysis measurements were employed to substantiate the existence of Fe3O4 and surfactant structure. The magnetic fluid can be used as targeted part of nanometer targeted drug delivery system.