The magnetic chitosan composite microspheres with magnetic CoNiFe2O4 particles as core and chitosan as outer coating are prepared by adding moderate glutaraldehyde into the chitosan solution containing diversified CoNiFe2O4 magnetic particles. The SEM, TEM, IR and XRD are used to detect the morphology and composition characteristics of the prepared CoNiFe2O4 magnetic chitosan microspheres. Then the prepared CoNiFe2O4 magnetic chitosan microsphere are used as oil displacement agent in the test of oil displacement in Shengli Oilfield and the results show that it has good ability in oil displacement and salt resistance.