A novel highly controllable process of Carbon Encapsulated Magnetic Nanoparticles (CEMNs) synthesis in arc discharge plasma has been developed. In this work, both the size distribution and the purity of the CEMNs have been made more controllable by adding an external magnetic field. It is shown that with the increase of the external magnetic field, the CEMNs get a better separation from the carbon impurities and the size distribution become narrower. This conclusion is valid for Fe, Ni and Fe + Ni CEMNs synthesis. In order to assess biomedical potential of these CEMNs, the cytotoxicity has also been measured for the human breast adenocarcinoma cell line MDA-MB-231. It was concluded that the CEMNs with the concentration in cell of about 0.0001-0.01 ug/ml are not toxic. (C) 2017 Elsevier Inc. All rights reserved.