Nano-Fe3O4 magnetic particles were prepared by ultrasonic emulsion method and then were dispersed into water with chitosan or folate as surfactants for biocompatible water-based Fe3O4 magnetic fluid. The cubic inverse spinel structure of Fe3O4 nanoparticles were analyzed by X-ray diffraction technique (XRD). The saturation magnetizations of different magnetic particles were tested by a vibrating sample magnetometer (VSM). The morphologies of nanoparticles were observed by transmission electron microscope (TEM). The particle size was about uniform 10-20 nm, and their shape was approximately spherical. Meanwhile, dispersity was improved markedly after the surface modification. Comparing to magnetic fluid with chitosan modification, magnetic fluid was coated with chitosan and folate gets higher dispersity and stability when both of them have same saturation magnetizations.