Abstract Iron and iron oxide nanoparticles in silica layers deposited by sol–gel techniques on Si wafers were formed and studied. It was shown that multifunctional nanoparticles of different iron oxides possessing various physical properties can be fabricated by means of post-growth annealing of (SiO2:Fe)/SiO2/Si samples in various atmospheres. The hematite, maghemite, and iron nanoparticles were found to be dominant upon annealing the samples in air, argon, and hydrogen atmosphere, respectively. The physical properties of produced hybrid structures were studied by Raman and FT-IR spectroscopy, spectroscopic ellipsometry, AFM, and magnetic measurements. The sol–gel technique with subsequent annealing procedure is demonstrated to be an effective method for the formation of multifunctional hybrid structures composed of iron or iron oxide nanoparticles in silica matrix.