Rate of heat generated by magnetic nanoparticles in a ferrofluid is affected by their magnetic properties, temperature, and viscosity of the carrier liquid. We have investigated temperature dependent magnetic hyperthermia in ferrofluids, consisting of dextran coated superparamagnetic Fe3O4 nanoparticles, subjected to external magnetic fields of various frequencies (188–375 kHz) and amplitudes (140–235 Oe). Transmission electron microscopy measurements show that the nanoparticles are polydispersed with a mean diameter of 13.8 ± 3.1 nm. The fitting of experimental dc magnetization data to a standard Langevin function incorporating particle size distribution yields a mean diameter of 10.6 ± 1.2 nm, and a reduced saturation magnetization (∼65 emu/g) compared to the bulk value of Fe3O4 (∼95 emu/g). This is due to the presence of a finite surface layer (∼1 nm thickness) of non-aligned spins surrounding the ferromagnetically aligned Fe3O4 core. We found the specific absorption rate, measured as power absorbed per gram of iron oxide nanoparticles, decreases monotonically with increasing temperature for all values of magnetic field and frequency. Using the size distribution of magnetic nanoparticles estimated from the magnetization measurements, we have fitted the specific absorption rate versus temperature data using a linear response theory and relaxation dissipation mechanisms to determine the value of magnetic anisotropy constant (28 ± 2 kJ/m3) of Fe3O4 nanoparticles.