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Magnetite nano-particles have been synthesized by reverse co-precipitation method using iron salts in alkaline medium in the presence of diethylene glycol (DEG). Effect of DEG on the nano-particle characteristics was investigated by XRD, FE-SEM, FTIR and VSM techniques. From XRD results it was concluded that in the presence of DEG the composition of magnetite did not change, however the mean crystallite size reduced from 10 to 5 nm. SEM micrograph showed that DEG decreased the size of spherical magnetite nano-particles from 50 to 20 nm. Fourier transform infrared spectra (FTIR) indicated that the DEG molecules chemisorbed on the magnetite nano-particles. Under the given experimental conditions, the rate of crystallization and growth reduced, which is probably due to the capping of DEG to the magnetite nano-particles. The agglomeration was also decreased which is attributed to the coating of magnetite nano-particles by DEG which prevents the formation of hydrogen bonding between magnetite and water molecules.