PEG-modified ZnGd0.1Fe1.9O4 ferrite nanoparticles were synthesized by a coprecipitation process combined with a microemulsion technique. The effect of modification on the structure, magnetic properties of ZnGd0.1Fe1.9O4 nanoparticles was also investigated by XRD, FTIR, TEM and VSM. The results showed immobilizing PEG on the surfaces of magnetic nanoparticles effectively improved their dispersibility. Magnetic measurements indicated that the as-prepared PEG-modified nanoparticles exhibited relatively high magnetic properties, although a slight reduction in saturation and remanent magnetization were observed compared with unmodified samples. Therefore, with promising high magnetic behavior and potentially good biocompatibility, PEG-modified ZnGd0.1Fe1.9O4 ferrite nanoparticles would be feasible as thermoseeds for interstitial hyperthermia to tumor.