Highly crystalline superparamagnetic Fe3O4 nanoparticles coated by polyvinylpyrrolidone (PVP) were prepared by simultaneous thermal decomposition of ferrous and ferric inorganic salts in polyethylene glycol (PEG) with molecular weight 200. The magnetic particles have a diameter in the range of 8-15 nm, and after exchange with citric acid diammonium salt, they transform into very stable super hydrophilic colloidal solutions. The presence of magnetite phase was confirmed using powder X-rays diffraction (XRD) and Mössbauer spectroscopy, while thermogravimetric analysis and FT-IR spectroscopy confirmed the presence of PVP or citrate anions on the nanoparticles surface. The magnetic properties revealed superparamagnetic behavior, with the composite material showing a saturation magnetization up to 57 emu/g. The Fe3O4 nanoparticles prepared by this modified polyol process are suitable for biomedical applications because of the biocompatibility of citrate anions. Magnetic hyperthermia experiments in neutral water solutions shows that the particles induce fast heating rates with specific absorption rate (SAR) values which reached 57.53 W/gFe, when the concentration of iron is 11.2 mgFe/ml.