A preparation method for synthesis of oil-based magnetic fluid is disclosed. One end of a compound with a diamino group or an organic extraction reagent is connected with oil-based material while the other end is connected with surfactant having a carboxyl group that further reacts with magnetic metal oxide nanoparticles containing surfactant to form a stable useful oil-based magnetic fluid. The present invention is applied to process wastewater with oil, organic compounds or inorganic metal ions. Under the control of the magnetic field, the floating oil on the water surface is collected. The method can also be applied to the separation as well as collection of materials in the water such as organic compounds and metals.