Microplasma is a novel technology for functional nanomaterial synthesis. In this research, iron oxide nanoparticles are successfully synthesized by a home-built microplasma setup. The setup is specially designed with overall safety considerations and broad operation space, including a smart micro reactor system which allows for flexible process control, easy assembling and direct product collection. The atmospheric pressure gas discharge was sustained in Ar flow with addition of ferrocene vapors as a precursor. The influence of the gas temperature and power dissipated in the discharge on the dissociation process is investigated. Optical emission spectroscopy (OES) is applied to study the impact of discharge parameters on plasma characteristics and possible mechanism of the ferrocene dissociation. The obtained products are characterized by scanning electron microscopy (SEM), energy dispersive X-ray spectrometer (EDX), transmission electron microscopy (TEM), high resolution TEM (HRTEM), X-ray diffraction (XRD) and X-ray photoelectron spectroscopy (XPS). Results show that nanometer-sized and well-dispersed iron oxide nanoparticles with polycrystalline nature can be produced by the atmospheric pressure micro plasma setup. The increase of temperature and power helps to enhance the precursor dissociation rate. However, it also contributes to the production of larger sized nanoparticles with higher agglomeration degree. Based on experimental data, simplified modeling as well as relevant information from literature, we proposed possible mechanisms for ferrocene decomposition. (C) 2017 Elsevier Ltd. All rights reserved.