Solar collectors are more efficient and commercial devices for collecting solar energy, compared to other solar energy utilizations. To improve the efficiency of solar collectors, it is important to prepare a liquid heat-collecting medium, which is stable and has high photothermal properties. Therefore, in this work, we develop a droplet–droplet mixing technique to prepare Fe3O4-H2O magnetic nanofluid. The results show that magnetic nanofluids prepared using the droplet–droplet mixing technique have more stable performance and a better encapsulation of dispersants than those prepared via traditional liquid–liquid mixing. Then, the thermal conductivity and photothermal properties of Fe3O4-H2O magnetic nanofluids are investigated experimentally and theoretically. The thermal conductivity and temperature of the magnetic nanofluid with Fe3O4nanoparticles of a 1.0% volume fraction can reach the maximum value of 0.95 W/m∙K and 73.9 °C when the magnetic field strength is equal to the saturation magnetic field of 800 Gs. These findings provide insights into the potential applications of Fe3O4-H2O magnetic nanofluids in direct absorption solar collectors, heat exchangers, automobile radiators, etc.