In this work, we aim to synthesize water soluble and surface functionalized superparamagnetic iron oxide nanoparticles (SPIONs) using novel surfactants such as terephthalic acid (TA), 2-aminoterephthalic acid (ATA), trimesic acid (TMA) and pyromellitic acid (PMA) through one-step facile chemical co-precipitation and thermal decomposition methods. The as-synthesized SPIONs are characterized using X-ray diffraction (XRD), transmission electron microscopy (TEM), dynamic light scattering (DLS) measurements, Fourier transform infrared spectroscopy (FTIR), thermogravimetric analysis (TGA) and vibrating sample magnetometer (VSM). The as-synthesized SPIONs showed very good water solubility and a high magnetization value (M_s = 55–73 emu g⁻¹). Furthermore, the as-synthesized ATA-coated SPIONs are conjugated with a fluorophore (Alexa Fluor 488) to demonstrate their ability for further chemical/biological conjugation without any additional surface modifications. Moreover, above 90% cell viability in MCF-7 cancer cells has been observed, thus confirming good cytocompatibility of the SPIONs. Therefore, these hydrophilic and carboxyl-amine functionalized SPIONs are very promising candidates to be used for biomedical applications.