Air stable cobalt nanoparticles have been prepared continuously at a production rate of 30 g h−1 by a modified flame synthesis method under highly reducing conditions. Nanoparticles of 20–60 nm in diameter consisted of metallic face-centered-cubic cobalt. The metal particles were protected against oxidation by a surface layer of less than 1 nm of cobalt oxide. The material was highly magnetic exhibiting a high saturation magnetisation (>124 emu g−1) together with a low (<100 Oe) coercivity. Experiments under varying fuel to oxygen ratio were combined with thermodynamic calculations to illustrate the necessity for highly reducing conditions and enhanced gas mixing to enable the formation of metallic cobalt nanoparticles in flames.