Nanofluids are engineered colloidal suspensions of nanometer-sized particles in a carrier fluid and are receiving significant attention because of their potential applications in heat transfer area. Theoretical investigations have shown that the enhanced thermal conductivity observed in nanofluids is due to nanoparticle clustering and networking. This provides a low resistance path to the heat flowing through the fluid. However, the surface coating of the nanoparticles, which is often used to provide stable dispersion over the long term, may act as a thermal barrier, reducing the effective thermal conductivity of the nanofluid. Moreover, nanofluids with the same type of nanoparticles may exhibit different effective thermal conductivities, depending upon the thermal properties and thickness of the coating. In this context, thermal conductivity characterization of well dispersed iron oxide nanoparticles with two different surface coatings was carried out employing the transient hot wire technique. The diameter of the iron oxide core was 35 nm and the coatings used were aminosilane and carboxymethyl-dextran (CMX) of 7nm in thickness. Preliminary results suggest that effective thermal conductivity of CMX coated nanoparticle suspensions is slightly higher than that of aminosilane coated nanoparticles. In both cases, the effective thermal conductivity is higher than that predicted by the Maxwell model for composite media.