Hydrophilic magnetic microgels were synthesized by a free-radical polymerization in inverse emulsion. Two sizes of magnetic microgels were obtained depending on the initial droplet size of the emulsion. As the polymer matrix is a hydrogel, the novelty of this paper is that the magnetic particles are incorporated from an aqueous magnetic fluid instead of an organic one. In this paper, we underline the physicochemical aspects necessary to control the proper dispersion of the magnetic particles in the polymer matrix. The size, the magnetic content and the swelling degree of micron-sized and sub-micron sized magnetic microgels are characterized. (C) 2004 Elsevier Ltd. All rights reserved.