Iron-based magnetic nanoparticles have been produced by decomposition of iron oxalate powder. The micrometer-size iron oxalate powder was first ground by use of a cryogenic milling process. A titanium dioxide (TiO2) thin film was then deposited on the synthesized iron nanoparticles with an in situ atomic layer deposition (ALD) process at 100 degrees C with TiCl4 and H2O2 as precursors. However, because of the high surface area, the iron nanoparticles were unstable and spontaneously oxidized when exposed to H2O2 during the TiO2 ALD process, thus reducing the magnetic moment of the core particles. As an improvement in the process, prior to the TiO2 deposition, an aluminum nitride (AIN) film Was deposited in situ to coat and passivate the iron core particles. The AIN ALD was performed at 250 degrees C with trimethylaluminium (TMA) and ammonia (NH3) as precursors. This passivation provided a significant decrease in the iron oxidation as determined by X-ray diffraction and magnetization measurements. Photoactivity of the TiO2 film was demonstrated by decomposition of methylene blue solution under ultraviolet irradiation.