Fine particles of cobalt and an iron-cobalt alloy were prepared and encapsulated in a plastic film to protect them from oxidation. The magnetic properties of the coated powders were determined and compared with the properties of coated iron powders studied previously. The thermal degradation of magnetic properties was also investigated. Polymer-coated iron and cobalt powders were incorporated in a Hypalon rubber matrix to obtain additional magnetic property data and to study recording characteristics. The experimental materials exhibited better high-frequency response in magnetic recording than a standard γ-Fe2O3material, and one material had a higher signal output as well.