Superparamagnetic iron oxide nanoparticles (SPIONs) were synthesized from Fe3+/Fe2+ salts in the presence of different coating bio-materials such as glycine, gelatin, gum arabic and mixture of gelatin and gum Arabic using NaOH as precipitating agent. The average diameter of crystallites for different samples is in the range of 7.8-13.5 nm deducted from X-ray diffraction (XRD). The size and size distribution of superparamagnetic iron oxide nanoparticles are also determined from the measured magnetization curve fitted by magnetic core and non-magnetic shell model based on the Langevin function with a Schulz size distribution. Particle size extracted from magnetization curve is consistent with crystallite size obtained from XRD. Further, non-magnetic shell is of the order of ~0.7 nm thick. The thickness of biocompatible protective layer is found to be ~4.5 nm. Fourier transform infrared (FTIR) spectra reveal the binding of coating materials on the surface of SPIONs. Atomic force microscope (AFM) images indicate the formation of colloidal cluster of size ~120 nm. Coated outer shell of organic materials used in the present study not only provided the stability to the nanoparticles in solution but also can be highly useful for biomedical applications due to their known bio-compatibility. © 2010 American Scientific Publishers.