FePt nanoparticles have been encapsulated in insulating and protective MgO shells, using a two step chemical process, in order to prevent sintering during the heat-treatment process required for the L1 0 ordering. The FePt nanoparticles were initially prepared using a standard polyol process and then dispersed in a magnesium oxide solution. As a basis for comparison FePt/ SiO 2 nanocomposites have been also synthesized using a modified aqueous sol-gel route as the second step. The magnetic and microstructural properties of FePt/ MgO and FePt/ SiO 2 nanocomposites are compared with those of FePt nanoparticles. The presence of oxide matrices leads to more homogeneous microstructures and better magnetic properties. While higher coercivity values have been obtained in FePt/ SiO 2 , the MgO matrix is proven to provide better physical and magnetic isolations of the FePt nanoparticles. However, for FePt:MgO molar ratios exceeding 1:20 no L1 0 ordering has been achieved.