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Magnetic cobalt nanoparticles encapsulated in shells of layered structure have been produced by the technique of pulsed laser ablation in toluene. The morphology, microstructure, and magnetic properties of the prepared nanoparticles were characterized by electron microscopy, micro-Raman spectroscopy, and superconducting quantum interference device magnetometry, respectively. The results indicated that the cobalt nanoparticles fabricated are noncrystalline but coated with the graphitic carbon layers. It is believed that the formation of these carbon layers well-protect the cobalt nanoparticles to be oxidized thus maintaining the superparamagnetic property. This is an important feature that makes the cobalt nanoparticles a useful material for medical and many other magnetic based applications.