This work is primarily focused on the synthesis of magnetic iron nanoparticles using poly-(N-vinyl pyrrolidone) as a protective agent. The nanoparticles were synthesized using a modified polyol route using iron chloride as precursor and sodium borohydride as the reducing agent in ethylene glycol. The resulting solutions, consisting of ethylene glycol and PVP-coated particles, were very stable. In order to extract the powders, the solutions were centrifuged and the resulting powders were cleaned and dried. The particle size was controlled by varying the FeCl3: PVP ratio. Electron microscopy results indicate a median primary particle size of ~20 nm. Dynamic light scattering studies were performed on the stable solutions, as well as the redispersed particles in 1-butanol. The bimodal distribution of the particle size in the solution indicates the formation of coated magnetic nanoparticles and salts of NaCl. The average particle sizes after redispersion in 1-butanol was measured at ~300 nm.