Magnetic colloids with nanoparticles inside have been successfully fabricated by laser ablation of a cobalt target immersed in solutions. using an Nd:YAG laser at wavelengths of 532 and 1064 nm. The liquid environment allows formation of the colloids with nanoparticles in uniform particle diameters. Influences of the laser wavelengths and different solutions on efficiency of particle formation were studied. The magnetic properties of the cobalt nanoparticles inside the colloids generated were also investigated. Using proper parameters, this method provides a convenient way for fabricating magnetic fluid as well as metal nanoparticles. (C) 2003 Elsevier B.V. All rights reserved.