Surface functionalized monodispersed Fe3O4 magnetic nanoparticles were synthesized by the polyol method. Surfactants were used to control size, shape and agglomeration of the magnetic nanoparticles during the preparation. The size of these nanoparticles was in the range of 10-30 nm as observed in transmission electron microscopy (TEM). The formation of monodispersed shapes was controlled by varying the surfactants without changing the reaction conditions. The x-ray diffraction (XRD) pattern validates the phase purity and cubic structure even after the addition of surfactants. The functional groups were observed from Fourier transform infrared (FTIR) spectroscopy analysis, confirming the surface modification with polymer molecules in the polyol medium. The saturation magnetization value decreases from 89 to 59 emu g-1 for the surfactant coated Fe3O4 nanoparticles and it also shows superparamagnetic behavior at room temperature. Cell viability rate and percentage of dead cells were accurately identified in human breast carcinoma cell lines using in vitro cell viability experiments, which confirms that pristine and surfactant coated Fe3O4 nanoparticles are non-toxic and can be used for biomedical applications. © 2014 IOP Publishing Ltd.