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Magnetic nanoparticles, which are unique because of both structural and functional elements, have various novel applications. The popularity and practicality of nanoparticle materials create a need for a synthesis method that produces quality particles in sizable quantities. This paper describes such a method, one that uses bacterial synthesis to create nanoparticles of magnetite. The thermophilic bacterial strain Thermoanaerobacter ethanolicus TOR-39 was incubated under anaerobic conditions at 65°C for two weeks in aqueous solution containing Fe ions from a magnetite precursor (akaganeite). Magnetite particles formed outside of bacterial cells. We verified particle size and morphology by using dynamic light scattering, X-ray diffraction, and transmission electron microscopy. Average crystallite size was 45 nm. We characterized the magnetic properties by using a superconducting quantum interference device magnetometer; a saturation magnetization of 77 emu/g was observed at 5 K. These results are comparable to those for chemically synthesized magnetite nanoparticles.