MgFe2O4 nanoparticles with different grain sizes were prepared by the low-temperature solid-state reaction method. The X-ray diffractometer (XRD), vibrating sample magnetometer (VSM), superconducting quantum interference devices (SQUID) and 57Fe Mössbauer spectroscopy (MS) were used to characterize the structure, magnetic properties and surface anisotropy of nanoparticles. Oxygen parameters suggested that lattice distortion was decreased with reducing particle size. In comparison with the bulk material, smaller saturation magnetization (Ms) and larger coercive force (Hc) for nanoparticles were observed. The critical sizes for transition from multidomain to single domain and for superparamagnetic transition were estimated to be 25 nm and 28 nm, respectively. In summary, the fabricating conditions for the low-temperature solid-state reaction method are studied to improve Ms and reduce Hc of the films, making the films suitable to the applications of the magnetic targeted drug.