Superparamagnetic iron oxide nanoparticles (SPION) with narrow size distribution and stabilized by polyvinyl alcohol (PVA) were synthesized. The particles were prepared by a coprecipitation technique using ferric and ferrous salts with a molar Fe3+/Fe2+ ratio of 2. Using a design of experiments (DOE) approach, the effect of different synthesis parameters (stirring rate and base molarity) on the structure, morphology, saturation magnetization, purity, size, and size distribution of the synthesized magnetite nanoparticles was studied by various analysis techniques including X-ray powder diffraction (XRD), thermogravimetric analysis (TGA) with differential scanning calorimetry (DSC) measurements, vibrating-sample magnetometer (VSM), transmission electron microscopy (TEM), UV-visible, and Fourier transform infrared (FT-IR) spectrometer. PVA not only stabilized the colloid but also played a role in preventing further growth of SPION followed by the formation of large agglomerates by chemisorption on the surface of particles. A rich behavior in particle size, particle formation, and super paramagnetic properties is observed as a function of molarity and stirring conditions. The particle size and the magnetic properties as well as particle shape and aggregation (individual nanoparticles, magnetic beads, and magnetite colloidal nanocrystal clusters (CNCs) are found to be influenced by changes in the stirring rate and the base molarity. The formation of magnetic beads results in a decrease in the saturation magnetization, while CNCs lead to an increase in saturation magnetization. On the basis of the DOE methodology and the resulting 3-D response surfaces for particle size and magnetic properties, it is shown that optimum regions for stirring rate and molarity can be obtained to achieve coated SPION with desirable size, purity, magnetization, and shape.