The functionalization of nanoparticles is important to improve their oxidation resistance, prevent agglomeration and improve stability of colloids. However, capping magnetic nanoparticles with a stable ultrathin layer of organic or inorganic materials, without compromising magnetic properties, is still a challenge. In this paper, we report for the first time a novel approach to prepare magnetite (Fe3O4) nanoparticles with superior thermal stability by capping them with a thin shell of silicon carbide (SiC), using sonochemical degradation of dimethyldichloro silane (DMDCSi). The synthesized silicon carbide capped Fe3O4 nanoparticles are characterized using Fourier transform infrared (FT-IR) spectroscopy, and thermogravimetric analyzer. FTIR analysis confirms the hydrophilic SiC capping over the Fe3O4 nanoparticles. The influence of silicon carbide capping over magnetic property and crystal structure was analyzed by vibrating sample magnetometer (VSM) and X-ray diffractometer (XRD) measurements, respectively. The possible mechanism of SiC capping over the particles is explained. SiC capped particles are hydrophilic in nature, where water molecules dissociate spontaneously on the surface of the SiC layer and form Si–OH and electropositive Si atom stabilizes the surface dangling bonds and reduces surface energy. The SiC-capped particles showed better thermal stability with an increased magnetic γ-Fe2O3 to the non-magnetic α-Fe2O3 phase transition temperature of >167 °C as compared to bare particles. The enhancement of phase transition temperature in SiC capped Fe3O4 is due to the increased activation energy by effective binding of SiC with the surface oxidized γ-Fe2O3 layer and the formation of an oxidized passive layer that acts as a thermal barrier. The results suggest that the surface oxidized maghemite (γ-Fe2O3) content over the Fe3O4 particles surface can improve SiC adsorption and enhance their phase stability significantly.