The formation of a novel hybrid material, NanoBuds, single-walled carbon nanotubes (CNTs) with covalently attached fullerenes was investigated in a ferrocene-carbon monoxide system. Fullerenes and CNTs were simultaneously formed by carbon monoxide disproportionation on the surface of iron particles in the presence of etching agents such as H2O and CO2. On the basis of parametric investigations and in situ sampling of the product from different locations in the reactor the mechanisms for NanoBud formation are discussed. (C) 2007 Elsevier B.V. All rights reserved.