Carbon‐coated iron, cobalt, and nickel particles were produced by an arc discharge process modified in the geometry of the anode and the flow pattern of helium gas. Field emission scanning electron microscopy shows that the resulting material consists of only carbon‐coated metal particles without any nanotubes or other unwanted carbon formations present. The diameters of iron, cobalt, and nickel particles range predominantly from 32 to 81 nm, 22 to 64 nm, and 16 to 51 nm, respectively. X‐ray diffraction analysis confirmed that the as‐made particles are carbon‐coated elements rather than metal carbides. High resolution transmission electron microscopy reveals that the as‐made cobalt and nickel particles are covered by 1–2 graphitic layers, while iron particles are surrounded by amorphous carbon. When the samples were treated by annealing or immersion into nitric acid, particles completely coated by carbon resisted both postdeposition treatments. However, further graphitization of the carbon coating by either of the two treatments was observed. Particles only partially coated by carbon were not protected, but sintered by annealing or dissolved in the acid. The magnetic properties of the as‐made particles were measured by a vibrating sample magnetometer. The values of the saturation magnetic moment per gram of each type of metal particle are 56.21, 114.13, and 34.9 emu/g representing 26%, 71%, and 64% of the saturation moments of the bulk ferromagnetic elements iron, cobalt, and nickel, respectively. All the metal particles were shown to be ferromagnetic with a ratio of remnant to saturation magnetizationMR/MS∼0.3 at room temperature (25 °C). In this article the detailed preparation and the properties of these carbon‐coated metal particles will be discussed. ©1996 American Institute of Physics.