Abstract: α-Fe nanoparticles were successfully prepaid by the reduction of Fe²⁺ by potassitum borohydride in simply ethanol/water system with the presence of surfactant. The volume percentage of ethanol in the system was 90%. The in-situ modification of the produced α-Fe was operated out taking advantage of the modifying solution incuding Ni²⁺. The structure characteristic and size of the particles produced were investigated by X-ray diffraction(XRD),X-ray photoelectron spectrum(XPS), transmission electron microscopy (TEM) and electron diffraction (ED). The results of XRD and XPS showed that the in-situ displacement reaction between metal α-Fe nanoparticles and Ni²⁺ made the produced nanoparticles to be formed well stable multilayer nanocomposite structure whose core are α-Fe nanoparticles. The TEM image illustrated that the produced nanoparticles were about 50nm in diameter and connected with each other to be link-like due to the magnetism.