Reversed micelles of cobalt-Aerosol-OT (Co(AOT) 2 ) in cyclohexane have been characterised by both UV-vis spectroscopy and small-angle neutron scattering (SANS). Changes in the UV-vis spectra are consistent with increasing polarisation of the Co 2 + ions as w ([H 2 O]/[AOT - ]) decreases. For w = 5.0 the SANS measurements show that cylindrical micelles, of radius 1.5 nm and length 20 nm, are present. These micelles have been used as nanoreactors to prepare colloidal cobalt by chemical reduction of Co 2 + with hydrazine and stable non-aqueous sols were produced. Transmission electron microscopy (TEM) showed that the resulting particles are polydisperse and up to 100 nm in diameter. The effects of water, cobalt and hydrazine concentration on the particle formation and stability have been investigated. At w = 5.0 the particle size and shape is very different from that of the parent reversed micelle. Variation of the initial micelle size, via the parameter w, apparently has little influence over the particle morphology.