The incorporation of magnetic nanoparticles into poly(N-isopropylacrylamide) (PNIPAAm) and chitosan microgels gives rise to hybrid systems that combine the microgels swelling capacity with the interesting features presented in magnetic nanoparticles. The presence of chitosan that act as surfactant for magnetic nanoparticles provides a simplistic approach which allows the encapsulation of magnetic nanoparticles without any previous surface modification. Spherical and highly monodisperse microgels with diameters in the range of 200 to 500 nm were obtained. The encapsulation of magnetic nanoparticles in the polymer matrix was confirmed by high resolution Scanning Electron Microscopy in transmission mode. Volume phase transition of the microgels was accessed by Dynamic Light Scattering measurements. It was observed that the thermosensitivity of the PNIPAM microgels still persists in the hybrid microgels; however, the swelling ability is compromised in the microgels with highest chitosan content. The heating performance of the hybrid magnetic microgels, when submitted to an alternating magnetic field, was also evaluated demonstrating the potential of these systems for hyperthermia treatments.