Magnetic hollow spheres were synthesized through a two-step process and were evaluated by Fourier transform infrared spectroscopy, scanning electron microscopy, super quantum interference device, vibrating sample magnetometry and Mossbauer spectroscopy methods. First, polystyrene spheres (PS) were produced using emulsion polymerization. Second, the PS spheres were coated via the sol-gel method to form an iron oxide layer. The size of the PS spheres was controlled by the concentration of the monomer (styrene), the initiator (potassium persulfate), and the emulsifier (sodium dodecylsulfate). The sol-gel coatings were prepared by controlled hydrolysis of aqueous solutions of FeCl3 in the presence of PS latex, polyvinylpyrrolidone, and hydrochloric acid. The composite was treated in air to burn off the PS latex. Temperature treatments were optimized after extensive differential thermal analysis and thermo gravimetric analysis characterization of the samples. Treatments under hydrogen atmosphere at various temperatures gave control over the formation and extend of magnetic phases in the nanocontainers such as a Fe, hematite (Fe2O3), and magnetite (Fe3O4). The size of the containers ranged between 300 and 400 nm.