Nanoparticles possess unique structural, mechanical, thermal, optical and chemical properties which are highly dependent on their size; therefore it is important to be able to synthesize them uniformly. In general they are synthesized using conventional batch-wise techniques; however microfluidic platforms are also used because they provide precise control over reaction conditions like mixing time, temperature, concentration and improved reaction kinetics. This work is the first study where coating of magnetic nanoparticles with chitosan is realized by utilizing a microfluidic platform. These particles have potential application in targeted drug delivery due to their magnetic behavior and the possibility of carrying drug in the chitosan layer. In the past, this synthesis reaction was performed by using batch wise techniques. In this work we demonstrate the synthesis of chitosan coated nanoparticles using a droplet based microfluidic platform. PDMS devices are fabricated using conventional soft lithography technique. Droplets from two different reagents are generated using double T junction with tapered geometry. The taper angle is optimized such that both reagents generate droplets alternatively with efficiency of more than 95%. Viscosity and surface tension of both droplet phase and continuous phase is taken into account to optimize the geometry. As both reagents need to be mixed in equal proportion, flow rates are adjusted to make the spacing and size of droplets identical. Later, two consecutive droplets are merged in a pillar structure by using the fact that increasing the width of channel will slow down the droplets. Dimensions of channels are optimized so that only two consecutive droplets are merging while pillars avoid accumulation of droplets at that location. Olive oil and silicon oil are used as the continuous phase while chitosan solution and iron chloride solution are used as dispersed phases to form alternating droplets. Then ammonia solution is added as dispersed phase and it forms another droplet at a T-junction and this droplet is merged with the upcoming droplet to initiate the reaction. Synthesized nanoparticles are characterized using transmission electron microscopy (TEM) and fourier-transform infrared spectroscopy (FTIR). As a side study, hydroxyapatite nanoparticles were also synthesized using this droplet-based microfluidic system at various concentration of reactants and results are analyzed using SEM imaging.