A colloidal suspension of magnetic particles coated with double layer surfactant molecules was prepared, characterized and used for separation of some chemicals. The aqueous magnetic fluid was prepared by chemical precipitation method and characterized by total organic carbon analyzer (TOC), thermogravimetric analysis (TGA) and transmission electron microscopy (TEM). The TOC and TGA measurements indicate that the prepared magnetic particles are coated with surfactant molecules in double layers. The outer surfactant layer has free polar heads. TEM measurement results show that magnetic particles are nanosized. A mixture of 2-hydroxyphenol (strong polar) and 2-nitrophenol (weak polar) was chosen as the target system. Results show that the magnetic fluid can selectively adsorb 2-hydroxyphenol from the mixture, whereas the adsorption of 2-nitrophenol is insignificant. For 2-hydroxyphenol, the adsorption equilibrium can be described well by Langmuir isotherm, and the adsorption kinetic can be fitted well by a linear driving force mass transfer model.