Fine Fe particles encapsulated in carbon cages were synthesized by employing both arc and surface wave plasma discharge techniques. The size of synthesized nanocapsules ranged from several 10s nm to 10 μm in diameter, which was approximately one order of magnitude larger than that of nanocapsules synthesized by the arc discharge method. The transmission electron micrographs revealed that the Fe particles were encapsulated in graphite shells. The selected-area electron diffraction patterns indicated that the Fe particles were single crystals. The fraction of a-Fe, g-Fe and Fe3C components in the nanocapsules synthesized under the total gas pressure of 1.0 kPa were estimated to be 83, 6, 11 wt%, respectively.