We observe a dramatic enhancement of thermal conductivity in a nanofluid containing magnetite particles of average diameter of 6.7nm under the influence of an applied magnetic field. The maximum enhancement in the thermal conductivity observed is 300% (k/kf=4.0) at a particle loading of 6.3vol%. The increase in thermal conductivity is attributed to the effective conduction of heat through the chainlike structures formed in the nanofluid. This finding is consistent with the theoretical prediction of enhanced thermal conductivity in nanofluid containing fractal aggregates [R. Prasher etal, Appl. Phys. Lett.89, 143119 (2006)].