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Aqueous ferrofluids having high steric stability were prepared biomimetically by chemical co-precipitation of iron salts in poly (vinyl) alcohol. Both conventional and microwave heating modes were used for the synthesis of the fluids; the bottleneck of conventional heating being low saturation magnetization. The uniqueness of this work lies in the fact that for the same initial constituents, microwave irradiation enhances saturation magnetization without compensating stability. Superparamagnetic iron oxide nanoparticles with a narrow size distribution were formed, and structural investigations of the dried fluid revealed that microwave irradiation increased the polydispersity and the average particle size of the nanocomposites which led to a loss of long-range ordering. X-ray diffraction patterns of the synthesized ferrofluids showed an increase in crystallinity for the microwave irradiated sample. All these structural rearrangements affected the saturation magnetization (Ms) which more than doubled from 12.97 to 27.07 kAm-1 with microwave irradiation.