Under the influence of a 0.05 T magnetic field, 15-nm diameter cobalt nanoparticles covered with surfactants in a colloidal solution assemble into highly constrained linear chains along the direction of the magnetic field. The magnetic-field-induced (MFI) chains become floppy after removal of the field, folding into three-dimensional (3D) coiled structures upon gentle agitation. The 3D structures are broken into smaller units with vigorous agitation. The nanoparticles redisperse into the solvent upon ultrasonic agitation. Optical microscopy and transmission electron microscopy (TEM) are used to characterize the morphologies of the nanoparticle assemblies at various stages of this reversible process. The hysteresis loops and zero-field cooled/field cooled (ZFC/FC) curves reveal the interparticle coupling in the assemblies. MFI assembly provides a powerful tool to manipulate magnetic nanoparticles.