Magnetic fluids used in biomedicine have to be biocompatible and therefore the magnetic nanoparticles are modified by different biocompatible materials. In this work the magnetic nanoparticles Fe3O4 sterically stabilized by sodium oleate were prepared by coprecipitation method. Consequently they were modified with polyethylene glycol (PEG) of different molecular weights and different PEG to magnetite Fe3O4 feed weight ratios varying from 0.01 to 30 to produce biocompatible magnetic fluids (MFPEG). The morphology was observed by scanning electron microscopy. The magnetic nanoparticles coated with PEG showed almost spherical shape for all studied systems of MFPEG. Differential scanning calorimetry (DSC) was used to study the adsorption of PEG on magnetic nanoparticles and to determine the maximal amount of PEG adsorbed on the magnetic nanoparticles. The increasing PEG molecular weight leads to the decrease in maximal PEG/Fe3O4 feed weight ratio. In vitro toxicity of the magnetic fluids using cells of skin cancer of mice B16 was tested with the aim to confirm the biocompatibility of the prepared magnetic fluids.