Heating an amorphous Co2+ :AlO(OH).alphaH(2)O gel under a reducing atmosphere of pure gas at 700-850 degreesC temperature results in surface stabilized Co-metal nanoparticles with a thin Al2O3 ceramic surface layer. At early temperatures during heating, the gel decomposes and disperses in a refined structure in divided Co2+ groups through a matrix of Al2O3 (amorphous). A reconstructive Co2+ + H-2 --> Co + 2H(+) reaction operates in the divided groups to result in isolated Co-particles. Formation and existence of Al2O3 layer (in a limited thickness t less than or equal to R-0, with R-0 similar to 4.28 nm the critical Al2O3 dimension to grow as a stable crystallite) over growing Co-particles control the process in a high-energy metastable fee or bee Co allotrope structure. Average crystallite size thus hardly grows to be as big as 41 nm. A large value of surface energy sigma = 0.790 J/m(2) in Al2O3, in comparison to 0.234 J/m(2) in fee or 0.279 J/m(2) in hcp Co, inhibits a moderate diffusion of surface atoms and in turn controls the nucleation and growth in small Co-particles. Otherwise, a particle of pure Co metal grows rapidly in the hcp bulk structure. The results of the Al2O3 surface modified fee and bcc Co are analyzed with X-ray photoelectron spectroscopy in correlation of X-ray diffraction and microstructure. (C) 2004 Published by Elsevier B.V.