Chemical looping methane partial oxidation provides an energy and cost effective route for methane utilization. However, there is considerable CO2 co-production in current chemical looping systems, rendering a decreased productivity in value-added fuels or chemicals. In this work, we demonstrate that the co-production of CO2 can be dramatically suppressed in methane partial oxidation reactions using iron oxide nanoparticles embedded in mesoporous silica matrix. We experimentally obtain near 100% CO selectivity in a cyclic redox system at 750-935 °C, which is a significantly lower temperature range than in conventional oxygen carrier systems. Density functional theory calculations elucidate the origins for such selectivity and show that low-coordinated lattice oxygen atoms on the surface of nanoparticles significantly promote Fe-O bond cleavage and CO formation. We envision that embedded nanostructured oxygen carriers have the potential to serve as a general materials platform for redox reactions with nanomaterials at high temperatures.