The heat transfer effect of nanofluid in electric heater was studied. Fe3O4⁃water nanofluid was prepared by two⁃step method. The effect of Fe3O4⁃water nanofluid with various nanoparticle concentrations (mass fraction of 0.1%~2.0%) on heating efficiency of the electric heater with or without magnetic field was studied. Mechanism of enhanced heat transfer by Fe3O4⁃water nanofluids under a magnetic field was also discussed. Results show that the Fe3O4⁃water nanofluid with a mass fraction of 1.0% obtains 18.2% enhancement of heat transfer on environment temperature compares to without a magnetic field. The Fe3O4⁃water nanofluid with a mass fraction of 1.0% obtains 35.1% enhancement of heat transfer on environment temperature with an external magnetic field. This research provides an important reference for enhancements of natural convective heat transfer in nanofluid applications.