Magnetite nanoparticles have been successfully synthesized in the presence of carrageenan polysaccharides using an in situ coprecipitation method. Iron coordination to the sulfate groups of the polysaccharide was confirmed by FTIR. The polysaccharide type (kappa, iota, or lambda) and concentration have been varied and their effects on particle morphology and chemical stability of the resultant nanocomposite investigated. The presence of carrageenan induces the formation of smaller particles, compared to those formed in the absence of polymer, and their average size depends on the nature and concentration of the polysaccharide used. The chemical stability of magnetite nanoparticles toward oxidation was also seen to depend on biopolymer type with magnetite formed in iota-carrageenan showing the highest chemical stability. A general tendency toward lower stability is observed as the polysaccharide concentration is increased. It is suggested that magnetite chemical stability in the carrageenan composites is determined by a fine balance between particle size and gel strength, the latter determining oxygen diffusion rates through the medium.