Abstract Dextran-modified iron oxide nanoparticles were prepared by precipitation of Fe(II) and Fe(III) salts with ammonium hydroxide by two methods. Iron oxide was precipitated either in the presence of dextran solution, or the dextran solution was added after precipitation. In the second method, the iron oxide particle size and size distribution could be controlled depending on the concentration of dextran in the solution. The nanoparticles were characterized by size-exclusion chromatography, transmission electron microscopy and dynamic light scattering. Optimal conditions for preparation of stable iron oxide colloid particles were determined. The dextran/iron oxide ratio 0–0.16 used in precipitation of iron salts can be recommended for synthesis of nanoparticles suitable for biomedical applications, as the colloid does not contain excess dextran and does not coagulate.