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Uniform, cubic 0.05-µm iron oxide particles were formed by forced hydrolysis of ferric perchlorate. These particles were reduced to α-Fe by heating in hydrogen at temperatures between 300 and 500 °C. The effect of reduction temperature and various prereduction treatments on the microstructure of the iron particles will be discussed. Complete reduction to α-Fe was established by 57Fe Mössbauer spectroscopy and x-ray diffraction. Magnetic measurements on epoxy and polyurethane films containing these particles with various mass fractions gave coercivities as high as 1000 Oe. The relationship between the magnetic measurements and the microstructure will be discussed. Na2SiO3 is found to be the best coating material for the process of reducing iron oxide particles to iron.