Zero-field birefringence was used to investigate maghemite-based biocompatible magnetic fluids surface-coated with citrate. The model used to analyze the birefringence signal considers the dipolar magnetic interaction among dimers and the onset of a nematic phase near the sample holder surface. The data show that zero-field birefringence grows with sample dilution. (c) 2005 Elsevier B.V. All rights reserved.