Carbon encapsulated magnetic nanoparticles may find many prospective biomedical applications, e.g., in drug and gene delivery systems, disease detection, cancer therapy, rapid toxic cleaning, biochemical sensing, and magnetic resonance imaging. Each of these applications hinges on the relationship between magnetic fields and biological systems. Herein we present the results on the thermal stability of carbon encapsulated magnetic nanoparticles. The products were synthesized by using induction radio frequency (RF) thermal plasma. Phase composition and morphology were studied by powder X-ray diffraction and HRTEM, respectively. Thermal stability was investigated by thermogravimetry and differential thermal analyses. Carbon nanostructures were thermally stable up to 500 K.