Carbon-coated MgO nanoparticles, with carbon forming a porous coating on the surface of MgO nanoparticles, have been prepared by two different techniques. Resorcinol has been found to be an efficient agent for the modification of magnesium methoxide leading to carbon-coated MgO nanocrystals of small crystallite size and high surface area. Decomposition of dry magnesium methoxide under an inert gas flow proved to be another efficient and economical way to synthesise carbon-coated MgO. The carbon coating acts as a hydrophobic barrier partially protecting the core metal oxide from water adsorption and conversion to magnesium hydroxide. However, destructive adsorption reactions can still proceed on the metal oxide surface, as evidenced by the dehydrochlorination of 2-chloroethyl ethyl sulfide (2-CEES) and 1-chlorobutane. The overall stability of the material in the presence of water vapor is significantly improved in comparison with non-coated nanocrystalline MgO.