Nanosized epsilon-Fe2O3 crystals with a diameter below 20 nm were successfully prepared at 600 degrees C in a mesoporous Silica matrix. The formation of the metastable iron oxide Occurred through nanoscale segregation in an immiscible SiO-Fe2O3 system having a mesoporous structure. The nanocrystals incorporated into ca. 50 nm-size particles of the mesoporous Silica exhibited a coercive field up to 8 kOe.