Nanocrystals of iron oxide in a silica matrix exhibiting a giant H-c value of 2.0 Tat room temperature are reported. The nanocomposite was obtained by combining reverse-micelle and sol-gel methods. The nanocrystals of iron oxide are composed of the epsilon-Fe2O3 phase, with rod-like particles 100-140 nm long and 20-40 nm wide. The Figure shows the hysteresis curve of the nanocrystals.