The stainless steel tube are widely used in aviation, medical treatment due to the corrosion resistance properties. In this study, a novel method employing a magnetic compound fluid (MCF) wheel was proposed for polishing the outer surface of stainless steel tube. Firstly, a polishing apparatus was constructed, in addition, the distribution of magnetic field of MCF wheel on the workpiece surface was explored by Maxwell software and Tesla meters, and the relationship between magnetic field distribution and material removal on the workpiece surface was investigated. Then, a material removal (MR) model was established and proved by the experimental results under the given conditions. Finally, The influence laws of carbonyl iron powder particle size d_CIP, abrasive particle size d_AP, magnet speed n_m, workpiece speed n_c and supply of MCF V on surface roughness Ra and reduction rate Ra% were investigated through experiments, and the mechanism of different parameters on surface quality was explored. The results show that the magnetic induction intensity during polishing is positively correlated with the polished profile of the workpiece. The trend of MR simulation is consistent with the experimental value, which prove the MR model is accurate. The smoothest surface of stainless steel tube can be achieved wherein the revolution speed of the magnet and workpiece (n_m = 200 rpm, n_c = 5000 rpm), amount of MCF slurry(V = 2 mL) were given using MCF containing carbonyl iron powder (15 μm) 50 wt. %, abrasive particle (7 μm) 12 wt. %, α-fiber 3 wt. %, magnetic fluid 35 wt. %. The final surface roughness decreased from 0.411μm to 0.007μm after 100 min polishing, the reduction rate is 98.297%, which demonstrated that this novel method is appropriate for polishing outer surface of tube.