A new method to PEGylate magnetic nanoparticles with a dense layer of poly(poly(ethylene glycol) monometh acry late) (P(PEGMA)) by surface-initiated atom transfer radical polymerization (ATRP) is reported. In this approach, an initiator for ATRP was first immobilized onto the magnetic nanoparticle surface, and then P(PEGMA) was grafted onto the surface of magnetic nanoparticle via copper-mediated ATRP. The modified nanoparticles were subjected to detailed characterization using FIFIR, XPS, and TGA. The P(PEGMA)-immobilized nanoparticles dispersed well in aqueous media. The saturation magnetization values of the P(PEGMA)-immobilized nanoparticles were 19 emu/g and 11 emu/g after 2 and 4 h polymerization respectively, compared to 52 emu/g for the pristine magnetic nanoparticles. The response of macrophage cells to pristine and P(PEGMA)-immobilized nanoparticles was compared. The results showed that the macrophage cells are very effective in cleaning up the pristine magnetic nanoparticles. With the P(PEGMA)-immobilized nanoparticies, the amount of nanoparticles internalized into the cells is greatly reduced to < 2 pg/cell over a 5 day period. With this amount of nanoparticles uptake, no significant cytotoxicity effects were observed.