Ultra tine iron particles stable up to 150 degrees C in the air is prepared by thermally reducing coprecipitated magnetite, the surface of which has been coated with amorphous silica in aqueous sodium silicate solution. The particle magnetization curve exhibited a saturation value of 1.57 x 10(-4) Wbm/kg including silicate as a coating material, corresponding to the doubling of magnetization of magnetite which can be dispersed as magnetic fluid, and a coercive force of about 1.6 x 10(4) A/m. A magnetic fluid stable against the atmosphere of the air for long periods is obtained by dispersing this silica-coated iron particles into ethylene glycol. (C) 1999 Elsevier Science B.V. All rights reserved.