We have reported the synthesis of water dispersible alginic acid (AA)-Fe3O4 nanocomposites. The crystallite size was obtained as 9 +/- 2 nm from X-ray line profile fitting. As compared to the particle size of 9.2 nm obtained from TEM analysis, these particles show dominantly single crystalline nature. Dielectric analysis show that the real and imaginary parts of the permittivity of both pure AA and AA-Fe3O4 nano-composite obey the ionic polarization mechanism comprised of ionic conductivity and interfacial or space charge polarization. Magnetization measurements show that the saturation magnetization of AA-capped magnetite is significantly lower than the theoretical bulk value, partly due to the structural distortions on the surface of the particles. Moreover, magnetite does not saturate and exhibits no coercivity above a certain temperature, revealing superparamagnetic behavior of the nanocomposite above a blocking temperature, T-B. of similar to 175 K. The magnetic core size, determined by theoretical fitting to the magnetization data at room temperature, is 9.55 nm. (C) 2010 Elsevier Ltd. All rights reserved.