Carbon fiber has become an important reinforcement material in composite materials because of its low density, high strength (up to 7 GPa) and tensile modulus up to 600 GPa. In addition, high electrical and thermal conductivity of carbon fiber makes it useful in a wide variety of products. A variety of carbon fibers are currently being considered for use in composite materials. The focus of this paper is the synthesis of catalyst particles in a vapor grown carbon fiber (VGCF) reactor. These reactors produce carbon fiber by pyrolysis of hydrocarbons over catalytic transition metal particles. The VGCF reactor being studied synthesizes iron sulfide catalyst particles inside the reactor as a part of the carbon fiber production process. The sulfur content of these particles is critical to their function as catalyst. A model has been developed to study the formation of catalyst particles in a flow reactor. The model is based on the nucleation of particles by collision of molecules of catalyst, which in turn are produced by gas phase reactions. Calculations have been carried out to determine the nucleation rates of the catalyst particles in the mixture, and the composition of the catalyst particles as they grow. Results indicate that submicron catalyst particles are produced in the process; the smallest catalyst particles are predicted to contain higher fraction of sulfur. Experimental studies have been also carried out to determine carbon fiber growth as a function of residence time.