The chemical reduction of ferrous or ferric ions to metallic iron by a reducing agent such as sodium borohydride (NaBH4), hydrazine (N2H4), or sodium phosphonate (NaH2PO2) and its subsequent oxidation were investigated for the preparation of iron-oxide nanoparticles in reverse micelles. The crystal structure and crystallinity of the oxide nanoparticles were found to depend on the oxidation potential of the reducing agent and the catalytic activity of the surface of deposited iron. In addition, it was demonstrated that the process used for oxidizing the metallic iron was critical for the formation of oxide nanoparticles, and that the enhancement of magnetic properties was achieved by providing a flow of oxygen during the oxidation process. (c) 2006 Elsevier Ltd. All rights reserved.