Single domain &egr;-Fe3N nitride particles have been synthesized by chemical reduction followed by nitridation at 823 K. The &egr;-Fe3N phase crystallizes in hexagonal structure with unit cell parameters,a=2.70 Å andc=4.39 Å. There is a reduction of unpaireddelectrons for intraband polarization as the nitrogen contributes to the density of states and thus results in lowering of magnetic moments. The reduction of intrinsic magnetizations and Curie temperatures with decreasing particle size is attributed to canted spin structure predominantly at the surface compared to the bulk of the particles. Chemisorption of oxygen results in the formation of oxynitride layer at the surface with a ferromagnetic coupling to the spins in the core of the particle. Mo¨ssbauer study of &egr;-Fe3N particles exhibits the coexistence of ferromagnetic and superparamagnetic particles and corroborates the observed magnetic properties. ©1997 American Institute of Physics.