Iron oxide nanoparticles (IONPs) are important tools for nanobiotechnology applications. However, aqueous instability and non-specific biodistribution problems limit the applications of IONPs. Considering this, alpha-phosphonic acid, omega-dithiopyridine functionalized polymers were synthesized via the reversible addition-fragmentation chain transfer (RAFT) polymerization and used for stabilizing and biofunctionalizing IONPs. A new trithiocarbonate RAFT agent bearing dimethyl phosphonate group was utilized in the synthesis of well-defined telechelic polymers of styrene, oligoethylene glycol acrylate (OEG-A) and N-isopropylacrylamide (NIPAAm). IONPs were grafted with alpha-phosphonic acid, omega-dithiopyridine functionalized poly(OEG-A) through the alpha-chain end of the polymer, as evidenced by FTIR-ATR, XPS and zeta potential measurements. Using TGA results, the grafting density of the polymer chains was calculated between 0.12 and 0.23 chains/nm(2) particle depending on the molecular weight of the polymer. DLS measurements indicated that the particles grafted with poly(OEG-A) larger than 10 000 g/mol were stable in water for several days and the mean diameter of the particles was between 40 and 130nm depending on the molecular weight of the polymer. Moreover, particles stabilized with poly(OEG-A) with a M(n) = 62 000 g/mol were stable in phosphate buffer (pH 6.5, 0.1 M) containing varying concentrations of BSA. Polymer-stabilized IONPs were successfully functionalized with two different peptides, i. e. reduced glutathione as a model peptide and NGR motif as a tumor-targeting peptide through the omega-dithiopyridine functionality of the polymer, as measured by XPS and zeta potential analysis. Poly(OEG-A)-stabilized IONPs were also found to be resistant to protein adsorption.