Nanoparticles of the Fe/Co alloy have been prepared by sonolysis of a Fe(CO)₅ and Co(NO)(CO)₃ mixture in diphenylmethane solution under argon. The as-prepared product is an amorphous material having 10 nm diameter particles. Upon annealing in argon at 600 °C for 5 h, an air-stable Fe/Co alloy is formed with an increased particle size to ∼40 nm. The Fe/Co alloy nanoparticles have been characterized by XRD, TEM, TGA, DSC, XPS, EPR, MES and magnetic susceptibility measurements. Materials obtained under appropriate conditions possess a very high saturation magnetization of about 150–238 emu g⁻¹ and good, soft magnetic properties (H_c = 70 − 30 G). The nanocrystalline particles have a core-shell structure in which the iron–cobalt core is surrounded by a carbon surface layer. The stability of the nanocrystalline particle has been discussed, based on the core-shell structure.