Ni80Fe20 permalloy nanoparticles (NPs) with narrow size distribution and homogeneous composition have been prepared by the polyol processing at 180 °C for 2h and their particle sizes can be tunable in the size range of 20-440 nm by proper addition of K2PtCl4 agent. X-ray diffraction results show that the NiFe NPs are of face centered cubic (FCC) structure. The addition of K2PtCl4 does not affect the composition of NiFe NPs but decreases the particle size remarkably. Both saturation magnetization and coercivity of the as-prepared NiFe NPs decrease with decreasing particle size. Annealed at 280 °C, however, the saturation magnetization of various size NiFe nanoparticles increases drastically and approaches to the bulk for the ∼440nm NiFe particles, however, a maximum coercivity (∼270 Oe) happens at a critical size of ∼50 nm. The magnetic property dependency of these NiFe NPs on annealing has been discussed by considering the surface chemistry.