Ferrofluids, which are stable dispersions of magnetic particles, behave as liquids that have strong magnetic properties. Nanoparticles of magnetite with a mean diameter of 10-15 nm, which are in the range of superparamagnetism, are usually prepared by the traditional method of co-precipitation from ferrous and ferric electrolyte solution. When diluted, the ferrofluid dispersions are not stable if anionic or cationic surfactants are used as the stabilizer. This work presents an efficient way to prepare a stable aqueous nanomagnetite dispersion. A stable ferrofluid containing Fe3O4 nanoparticles was synthesized via co-precipitation in the presence of poly(acrylic acid) oligomer. The mechanism, microstructure, and properties of the ferrofluid were investigated. The results indicate that the PAA oligomers promoted the nucleation and inhibited the growth of the magnetic iron oxide, and the average diameter of each individual Fe3O4 particle was smaller than 10 nm. In addition, the PAA oligomers provided both electrostatic and steric repulsion against particle aggregation, and the stability of dispersions could be controlled by adjusting the pH value of solution. A small amount of Fe2O3 was found in the nanoparticles but the superparamagnetic behavior of the nanoparticles was not affected.