We investigate the effect of adsorbed surfactant on the structural stability of CoFe2O4 nanoparticles during vacuum thermal annealing. In-situ high temperature X-ray diffraction studies show a reduction of oleic acid coated CoFe2O4 nanoparticles into alpha-Fe and CoO under annealing at 800 degrees C. On the contrary, the uncoated CoFe2O4 nanoparticles remains stable, with its cubic phase intact, even at 1000 degrees C. Thermogravimetric analysis coupled mass spectra reveals that the evolved carbon from the surfactant aids the removal of oxygen atom from CoFe2O4 lattice thereby reducing it to alpha-Fe and CoO phases. These results are important in tailoring stable CoFe2O4 nanostructures for various applications. (C) 2011 Elsevier B.V. All rights reserved.