Highly water-soluble Fe3O4/PAA (polyacrylic acid) nanoparticles (NPs) were synthesized with the high-temperature hydrolysis method. We report the first demonstration of Faraday rotation (FR) for a magnetic fluid (MF) synthesized with this novel method. The experiments were performed in the DC regime (0-6 . 10(-2) T) at room temperature for 14 concentrations from 1.8 mg/ml to 5 mg/ml. The maximum rotation was recorded as 0.96 degrees cm(-1) for 3.33 mg/ml and this is called the critical concentration (C-CRITICAL). It was found that the rotation tends to decrease when the concentration is higher than C-CRITICAL. The MF behavior for FR is discussed with respect to substructure interactions (particle-particle, chain-chain). This work provides a new insight for the FR investigations of MFs including highly water-soluble magnetic NPs.