The monodispersed Co nanoparticles were successfully prepared by means of hydrogen plasma method in inert atmosphere. The particle size, specific surface area, crystal structure and morphology of the samples were characterized by transmission electron microscopy (TEM), BET equation, X-ray diffraction (XRD), and the corresponding selected area electron diffraction (SAED). The catalytic effect of Co nanoparticles on the decomposition of ammonium perchlorate (AP) was investigated by differential thermal analyzer (DTA). Compared with the thermal decomposition of pure AP, the addition of Co nanoparticles (2%-10%, by mass) decreases the decomposition temperature of AP by 145.01-155.72 degrees C. Compared with Co3O4 nanoparticles and microsized Co particles, the catalytic effect of Co nanoparticles for AP is stronger. Such effect is attributed to the large specific surface area and its interaction of Co with decomposition intermediate gases. The present work provides useful information for the application of Co nanoparticles in the AP-based propellant.