Two different nanofluids were prepared by dispersing $Al_{2}O_3$ nanoparticles in transformer oil after hydrophobic surface modification. The agglomerated alumina nanoparticles with diameters from ${mu}m$ to mm were ball-milled and then treated with surfactants such as lauric acid, stearic acid and oleic acid. The surface characteristics of modified nanoparticles were examined by FTIR spectroscopy. It showed that the hydrophobicity of nanoparticles was caused by esterification between hydroxyl groups on the particle surface and functional groups of surfactant. The shape and size distribution of ball-milled particles were analyzed by TEM and PSA. The results compared with the primary particles indicated that the size distributions of nanoparticles were dependant on milling times. The dispersion stability of modified nanoparticles dispersed in oil was highly dependent on the composition and amounts of surfactants.