The physical and magnetic properties of magnetic nanoparticles are crucial for their effectiveness and reliability in biomedical applications. In this article, we report the synthesis of a stable Ho-substituted Mn–Zn ferrite ferrofluid and its physical and magnetic properties. Substitution by rare earth metal plays an important role in determining the magneto-crystalline anisotropy in 4f-3d inter-metallic compounds. Ho3+ substitution not only enhanced the magnetic anisotropy but also produced strong spin frustration at low temperature. The field dependence of blocking temperature shows H2/3 dependency in the entire range of field, i.e., 10–700 Oe, indicating the emergence of Ising spins characteristics in the present system.