In this paper, we report single step synthesis of hydrophilic superparamagnetic magnetite nanoparticles by thermolysis of Fe(acac)3 and their characterization of the properties relevant to biomedical applications like hyperthermia and magnetic resonance imaging (MRI). Size and morphology of the particles were determined by Transmission electron microscopy (TEM) while phase purity and structure of the particles were identified by X-ray diffraction (XRD) and Fourier transform infrared spectroscopy (FTIR). Magnetic properties were evaluated using vibrating sample magnetometer (VSM) and superconducting quantum interference device (SQUID) measurements. The as prepared nanoparticles were found to be superparamagnetic with the blocking temperature of 136 K and were easily suspendable in water. Cytotoxicity studies on human cervical (SiHa), mouse melanoma (B16F10) and mouse primary fibroblast cells demonstrated that up to a dose of 0.1 mg/ml, the magnetite nanoparticles were nontoxic to the cells. To evaluate the feasibility of their uses in hyperthermia and MRI applications, specific absorption rate (SAR) and spin-spin relaxation time (T2) were measured respectively. SAR has been calculated to be above 80 Watt/g for samples with the iron concentration of 5-20 mg/ml at 10 kA/m AC magnetic field and 425 kHz frequency. r2 relaxivity value was measured as 358.4 mM(-1)S(-1) which is almost double as compared to that of the Resovist, a commercially available MRI contrast agent. Thus the as-prepared magnetite nanoparticles may be used for hyperthermia and MRI applications due to their promising SAR and r2 values.