Forward osmosis (FO) is attracting worldwide attention as an emerging technology in the fields of power generation, water reuse, desalination, pharmaceuticals and food processing. Still, the critical challenge of finding a suitable draw solute for FO persists. Therefore the current research focuses on synthesizing hydrophilic magnetic nanoparticles (HMNPs) and systematically investigating their potential as draw solutes. HMNPs were synthesized using functional groups polyethylene glycol (PEG 400) and polyacrylic acid (PAA). These functional groups under different ratios with a metal precursor react by one-pot polyol and thermal decomposition methods respectively to give different diameter HMNPs. In addition the effect of different sizes of synthesized HMNPs was investigated for their recovery under an external magnetic field and reusability in FO performance. The physical properties and chemical compositions of the resultant MNPs are fully characterized. Transmission electron microscopy (TEM) analyses show the characteristics as spherical morphology with a narrow size distribution, and a mean size from 9 to 32.5 nm for PEG and 8 to 30 nm for PAA coated HMNPs depending on the ratio of the functional group and metal precursor. The PEG and PAA layer on the MNPs is confirmed by Fourier transform infrared (FTIR) analysis, and thermogravimetric analysis demonstrates a hydrophilic surface composition. The PEG and PAA coated HMNPs generate high osmotic pressures and exhibit good dispersibility in aqueous solutions. Water fluxes of >13 L m−2 h−1 are achieved across Hydration Technologies Inc. flat sheet membranes at a concentration of 0.05 M of HMNPs using deionized water as the feed solution. The HMNPs can be easily recaptured from draw solutions by applying an external magnetic field and recycling them back as draw solute in the FO process. The MNPs remain active after nine runs of recycling but with a total water flux decrease of 5% in PEG and 3% with each successive recycling due to slight aggregation, and reduced surface to volume ratio is observed. Results of the present study have demonstrated that PEG and PAA coated HMNPs can viewed as promising and potential draw solutes in the FO process.