Magnetic microspheres with nonmagnetic acrylic glass core were fabricated using electroless deposition. There are favorable conditions for magnetic flux closure within each particle. As a result, the dipole-dipole interaction in the powder of such microspheres is reduced drastically. This is the key difference between powders of magnetic microspheres and powders of full magnetic spherical particles witch behavior is significantly affected by the dipole-dipole interaction. The magnetic hysteresis in the cobalt microspheres with nonmagnetic core is significantly large then in the full cobalt particles produced using the same technique. Keywords: Magnetic microspheres, magnetic dipole-dipole interaction.