The systematic studies on synthesis of carbon-encapsulated iron nanoparticles by a carbon arc route are presented. The influence of several operational parameters (Fe content in the anode (7.5-65.0 at.%), discharge current (30-80 A), and preparation procedure of the anode) on the yield, selectivity, morphology, diameter distribution, phase composition, graphitization degree and magnetic properties of the products is investigated. It is found that Fe content in the anode is a parameter that entirely controls the yield, diameter distribution, graphitization degree and magnetic properties of carbon-encapsulated iron nanoparticles. This parameter also influences the process selectivity. Two other factors, i.e. the discharge current and preparation procedure of the anode, slightly affect the product morphology, diameter distribution and graphitization degree. The phase composition neither depends on the Fe content in the anode nor the discharge current. It is also found that the studied synthesis process has high reproducibility and has a potential to be scaled up. (C) 2013 Elsevier B.V. All rights reserved.