This article shows the settling behaviors of flocculated, magnetic and nonmagnetic iron oxide suspensions. It is unique, since in the literature on settling of model submicron flocculated particulate suspensions there is no direct visualization of the structures and how they change during settling. Channeling, cracking, and a novel collapse phenomenon were detected during settling. Causes were investigated using lapse videorecording for side and top views. The effect of air bubbles was shown to contribute to the accelerated settling of the suspension by creating channels that conduct oil to the settling front. Settling heights were recorded for long periods of time (up to a year) for iron oxide suspensions of different concentrations. Decreasing tube diameters delayed settling, and magnetic interparticle forces produced smaller final settling heights. The effect of magnetic forces was interpreted in terms of a floc model. The model finds magnetic flocs 1.3 to 1.4 times denser than their nonmagnetic analogs. Finally, a mechanism is put forth to interpret the settling behavior observed.