The conditions for the preparation of cobalt-modified magnetic iron oxide have been investigated. From an aqueous solution containing cobalt and iron chlorides in which magnetic iron oxide particles are suspended, the product is obtained by reaction with caustic soda. The pH of the solution during the process has a direct influence on the nature of the product, with pH 12 yielding the desired compound CoFe2O4. The concentration of cobalt and also the cobalt-to-iron ratio have a direct bearing on the coercivity of the products obtained. The coercivity increases with increase in the cobalt content, and the incorporation of about 1.8 wt% Co results in an increase of coercivity by 25% over that of the precursor. The cobalt efficiency depends on the cobalt-to-iron ratio in the solution and reaches the maximum when the ratio is 2.45.