It remains a significant challenge for the scalable production of ultrafine silicon carbide (SiC) nanoparticles with sizes smaller than 10 nm. In this work, a novel process based on atmospheric nonthermal arc plasma was proposed for the continuous synthesis of ultrafine SiC nanoparticles. This low-cost and scalable technique allows preparation of SiC nanoparticles with small size (5-9 nm) and narrow size distribution via hexamethyldisilane (HMDS) decomposition in an argon/hydrogen plasma environment. The as-synthesized products were carbon-rich β-SiC nanoparticles with plentiful functional groups on the surface. The addition of hydrogen in plasma gas can tune the product characteristics, such as decreasing particle size, improving crystallinity, and reducing carbon and oxygen contents. Moreover, the as-prepared β-SiC nanoparticles had a high band gap (around 2.5 eV), and their photoluminescence peak showed an obvious blueshift relative to that of bulk β-SiC, which was mainly attributed to the quantum confinement effect induced by their ultrafine size. According to the spectral information of arc plasma, the formation of SiC nanoparticles in the plasma was discussed.