Carbon-encapsulated magnetic nanoparticles are core-shell nanostructures with the mean size generally below 50 nm. Their unique properties result from the intrinsic nature of the encapsulated magnetic nanocrystallites and the high stability of the external carbon coating. Carbon-encapsulated magnetic nanoparticles may find different prospective applications, e.g., in magnetic data storage, catalysis, xerography, magnetic resonance imaging, and in biomedical applications. Herein, we present for the first time the results of the optical limiting properties of carbon-encapsulated magnetic nanoparticles. It was found that optical limiting performance strongly depends on the surface properties of carbon nanostructures rather than of their magnetic characteristics. (c) 2007 Elsevier B.V. All rights reserved.