Oleic acid which is one of the palm oil derivatives is known to effectively stabilize dispersions of nanomagnetite in nonpolar solvent. Stabilization occurs because the carboxylic acid group covalently reacts with the surface of the magnetite and the aliphatic chain extends out into the nonpolar solvent, preventing aggregation of the particles by a steric (entropic) mechanism. One goal of this work has been to develop a generalized methodology for stabilizing nanomagnetite dispersions using a series of novel surfactants which had been synthesized from palm oil derivatives so that the resultant modified magnetite nanoparticles can be used in a range of applications. The specialty of the surfactants which have thiol compounds attached to the long chain fatty acids have been succesfully coated with magnetite iron oxide as shown on the FTIR spectrum and exhibited a particle size in the range of 25-30 nm as shown on the FT-SEM. These nanoparticles have been characterized by Dynamic Light Scattering, Zeta-potential to examine their stabilities after coating. In addition to that, the X-ray diffraction pattern showed that the modified nanoparticles corresponds to the spinal phase of the bare magnetite iron oxide.