A series of ferrofluids were made using oleic acid-capped Co3O4 (cobalt oxide) nanoparticles in liquid paraffin by a high-energy milling/sonication method. The average physical size of the dry Co3O4 nanoparticles was determined to be 21 nm by measuring the peak broadening of the (311) crystal plane from X-ray diffraction data of the nanopowder. The results of measurements by an alternative gradient force magnetometer indicated that the dry nanoparticles were paramagnetic. The prepared colloids were characterized by dynamic light scattering and found to contain aggregated nanoparticles having between 51 and 835 individual particles per aggregate. The rheological properties of these ferrofluids were then studied using a standard rotating rheometer, both in the presence and absence of an externally applied magnetic field. Magnetoviscous and thixotropic effects on the ferrofluids viscosity were studied as both the nanoparticle concentration and the applied magnetic field was varied. Nanoparticle aggregation and its effect on the rheological properties of these ferrofluids is discussed (i.e. the interactions between nanoparticles and aggregates). At nanoparticle concentrations above 30 wt%, a combined thixotropic/magnetoviscous effect on the fluids viscosity was observed. The ferrofluids exhibited a thixotropic behaviour with little magnetoviscous effect at more dilute nanoparticle concentrations, 25 wt%.