The iron oxide (Fe₃O₄) magnetic nanoparticles have been fabricated through a simple, cheap and reproducible approach. Scanning electron microscope, x-rays powder diffraction of the fabricated nanoparticles. Furthermore, the fabrication of potentiometric urea biosensor is carried out through drop casting the initially prepared isopropanol and chitosan solution, containing Fe₃O₄ nanoparticles, on the glass fiber filter with a diameter of 2 cm and a copper wire (of thickness −500 μm) has been utilized to extract the voltage signal from the functionalized nanoparticles. The functionalization of surface of the Fe₃O₄ nanoparticles is obtained by the electrostatically immobilization of urease onto the nanobiocomposite of the chitosan- Fe₃O₄ in order to enhance the sensitivity, specificity, stability and reusability of urea biosensor. Electrochemical detection procedure has been adopted to measure the potentiometric response over the wide logarithmic concentration range of the 0.1 mM to 80 mM. The Fe₃O₄ nanoparticles based urea biosensor depicts good sensitivity with ~42 mV per decade at room temperature. Durability of the biosensor could be considerably enhanced by applying a thin layer of the nafion. In addition, the reasonably stable output response of the biosensor has been found to be around 12 sec.