Highly monodispersed magnetite nanoparticles with controlled particle size and mPEG surface coating have been successfully synthesized as a model system to investigate the effect of surface coating on the specific absorption rate (SAR) under an alternating magnetic field. Enhanced SAR with decreased surface coating thickness was observed and ascribed to the increased Brownian loss, improved thermal conductivity as well as improved dispersibility. By elaborate optimization of the surface coating and particle size, a significant increase of SAR (up to 74%) could be achieved with a minimal variation of the saturation magnetization (<5%). In particular, the 19nm@2000 sample exhibited the highest SAR of 930 W g−1 among the samples. Furthermore, this high heating capacity can be maintained in various simulated physiological conditions. Our results provide a general strategy for surface coating optimization of magnetic cores for high performance hyperthermia agents.