The structure-directing nature of block copolymers, combined with the "miniemulsion" polymerization process, facilitate synthesis of superparamagnetic latex loaded with nanometric magnetic iron oxide. A "double-hydrophilic" diblock copolymer (polyethylene oxide block-co-polymethacrylic acid), present during the precipitation of magnetic iron oxide, directs nucleation, controls growth, and sterically stabilizes the resulting 5 nm superparamagnetic iron oxide. After drying, the coated particles spontaneously repeptize into a mixture of hydroxyethylmethacrylate and methacrylic acid monomers, creating a ferrofluid-like dispersion. Inverse emulsification of the ferrofluid (magnetic particles plus monomer) into decane, aided by small amounts of diblock copolymer emulsifier along with ultrasonication, creates minidroplets (180 nm) filled with magnetic particles and monomer. Subsequent polymerization generates magnetic latex. Extensive characterization by scanning electron microscopy, transmission electron microscopy, dynamic light scattering, thermogravimetric analysis, magnetic measurements, and x-ray diffraction shows complete and uniform encapsulation of 5 nm magnetic iron oxide into latex of average diameter between 140 and 220 nm depending upon emulsifier concentration. The magnetically active latex contains 18 wt% magnetic iron oxide coated with hydrophilic polymers. In a minimum number of steps, the direct dispersion of magnetic particles in monomer and inverse miniemulsification process generates hydrophilic magnetic latex.