Magnetic polyvinyl alcohol (M-PVA) films were prepared via solution casting filled with surface modified super-paramagnetic nanoparticles (M-NPs). The M-NPs were coated with citric acid during synthesis. The chemical interaction between the citric acid and M-NPs was confirmed by Fourier transform infrared spectroscopy (FTIR). The average hydrodynamic diameter of M-NPs was 19.7nm measured by dynamic light scattering DLS and appeared almost spherical in SEM. The M-NPs were uniformly dispersed in polyvinyl alcohol (PVA) matrix and showed high optical transparency with good mechanical properties. M-PVA hydrogels were synthesized using gamma irradiation. The characteristic XRD peak of PVA at 19.4 was split after irradiation, indicating formation of different crystallite sizes. The M-PVA hydrogel showed higher saturation magnetization compared to un-irradiated M-PVA. Also, the presence of M-NPs enhanced the cross-linking of PVA by irradiation.