A mechanistic detailed study on the formation of cobalt-encapsulating carbon nanoflasks is reported. Carbon nanoflasks were prepared from the decomposition products Of CO(CO)(3)NO, by carrying out the reaction in a specially arranged closed cell at 900 degreesC. The carbonaceous materials were separated from the product by a simple acid-treatment method. Structural and compositional analyses of the individual nanoflasks by selected area energy dispersive analysis by X-ray and selected area electron diffraction provided information about the formation mechanism of the cobalt filled nanoflasks. It was found that the Mg plays an important role by partially covering the cobalt particles. Over the exposed surfaces of these cobalt particles, nanotubes are nucleated via a CO decomposition reaction, which is believed to be promoted by Mg. Since the attached cobalt particles are comparatively bigger than the tubular part, the appearance of a nanoflask is obtained.