One aspect of the present invention relates to magnetic nanoparticles colloidally stabilized in aqueous milieu by association with an organic phase. The organic phase may be either a fluorinated polymer or an organic hydrocarbon bilayer, wherein the two layers are chemically bonded to each other. The stabilized particles are further non-toxic and provide useful enhancements in bioprocesses. Another aspect of the present invention relates to compositions comprising an oxygen-dissolving fluid vehicle and surface modified, nanometer-sized magnetic particles. The inventive compositions have utility in a wide range of applications, but are particularly suitable for use as recyclable oxygen carriers, separation and purification vehicles, and bioprocessing media, including fermentation processes.