Iron oxide magnetic nanoparticles with a narrow size distribution were prepared by thermal decomposition of iron (III) acetylacetonate using benzyl alcohol as the only solvent. The structure and morphology of the as-prepared nanoparticles were characterized by transmission electron microscopy (TEM), X-ray diffraction (XRD), and dynamic light scattering (DLS). Fourier transforminfrared (FT-IR) spectroscopy and thermal gravimetric analysis (TGA) were used to study the surface chemistry of the particles, and it was found that the nanoparticles were stabilized by benzoic acid molecules with less than 20% monolayer coverage. At room temperature, the surface ligands can easily exchange for other molecules. This method will facilitate the functionalization and application of iron oxide magnetic nanoparticles.