Ferrofluids are colloidal suspensions, in which the solid phase material is composed of magnetic nanoparticles, while the base fluid can potentially be any fluid. The solid particles are held in suspension by weak intermolecular forces and may be made of materials with different magnetic properties. Magnetite is one of the materials used for its natural ferromagnetic properties. Heat transfer performance of ferrofluids should be carefully analyzed and considered for their potential of their use in wide range of applications. In this study, convective heat transfer experiments were conducted in order to characterize convective heat transfer enhancements with lauric acid coated ironoxide (Fe3O4) nanoparticle based ferrofluids, which have volumetric fractions varying from 0% to ∼5% and average particle diameter of 25 nm, in a hypodermic stainless steel microtube with an inner diameter of 514 μm, an outer diameter of 819 μm, and a heated length of 2.5 cm. Heat fluxes up to 184 W/cm2 were applied to the system at three different flow rates (1 ml/s, 0.62 ml/s, and 0.36 ml/s). A decrease of around 100% in the maximum surface temperature (measured at the exit of the microtube) with the ferrofluid compared to the pure base fluid at significant heat fluxes (>100 W/cm2) was observed. Moreover, the enhancement in heat transfer increased with nanoparticle concentration, and there was no clue for saturation in heat transfer coefficient profiles with increasing volume fraction over the volume fraction range in this study (0–5%). The promising results obtained from the experiments suggest that the use of ferrofluids for heat transfer, drug delivery, and biological applications can be advantageous and a viable alternative as new generation coolants and futuristic drug carriers.