The effects of pH, MNP concentration, and medium viscosity on the magnetic fluid hyperthermia (MFH) properties of chitosan-coated superparamagnetic Fe3O4 nanoparticles (MNPs) are probed here. Due to the protonation of the amide groups, the MNPs are colloidally stable at lower pH (∼2), but form aggregates at higher pH (∼8). The increased aggregate size at higher pH causes the Brownian relaxation time (τ B) to increase, leading to a decrease in specific absorption rate (SAR). For colloidal conditions ensuring Brownian-dominated relaxation dynamics, an increase in MNP concentrations or medium viscosity is found to increase the τ B. SAR decreases with increasing MNP concentration, whereas it exhibits a non-monotonic variation with increasing medium viscosity. Dynamic hysteresis loop-based calculations are found to be in agreement with the experimental results. The findings provide a greater understanding of the variation of SAR with the colloidal properties and show the importance of relaxation dynamics on MFH efficiency, where variations in the frequency-relaxation time product across the relaxation plateau cause significant variations in SAR. Further, the in vitro cytotoxicity studies show good bio-compatibility of the chitosan-coated Fe3O4 MNPs. Higher SAR at acidic pH for bio-medically acceptable field parameters makes the bio-compatible chitosan-coated Fe3O4 MNPs suitable for MFH applications.