Well dispersed iron-based magnetic nanoparticles have been prepared by gas phase laser-driven decomposition of iron pentacarbonyl. Agglomeration of the newly synthesized nanoparticles could be avoided by using a liquid collection system in which the exit stream from the laser reactor was bubbled through triethylene glycol (TREG). The effect of different experimental parameters (precursor concentration, laser power, working pressure, residence time) was studied and, by selecting the appropriate conditions, the size of the resulting magnetic nanocrystals could be tuned from ultrasmall (ca. 2.5 nm) to around 12 nm. For nanoparticle sizes around 10 nm and larger a metallic iron core could be preserved. These iron/iron oxide core-shell compositions exhibit very high values of magnetization, 127 emu g(-1).