The magnetite (Fe3O4) particles that have been coated using tetraethyl orthosilicate (TEOS) as silica precursors were used as the additive in the lubricant. The effects of silica-coated magnetite additive on the thermal properties of ferro-lubricant and reducing the friction on a steel plate have been investigated. The characterizations were conducted at both conditions: with and without the addition of Fe3O4 particles. The characterization using TEM proposed that the average particle size of the silica-coated magnetite particles is 150 nm. The TGA/DSC curves of the silica-coated magnetite particles suggested a gradual weight loss obtained as the temperature increased. The endothermic peak was obtained at ~37 and 50 °C. The silica-coated magnetite particles’ additive increases both the density and viscosity of 0.84 g/cm3 and 134.29 cSt. The silica-coated magnetite particles additive in the lubricant enhances the thermal conductivity and specific heat of 0.151 W/m.K and 1600 J/kg.K. Ferro-lubricant reduces the friction coefficient up to 0.02 (static) and 0.005 (dynamic). The wear resistance of the plate could be improved as analyzed using an optical microscope. These results demonstrate a promising application of the silica-coated magnetite particles as an additive in the lubricant. Therefore improving wear resistance and cooling during the friction process.