Ferromagnetic nanoclusters are very useful for a magnetic recording. However, the application of ferromagnetic nanoclusters is limited due to air-oxidation. One way to solve air- oxidation is to encapsulate ferromagnetic nanoclusters with inert materials such as carbon when they are produced. This allows us to keep excellent magnetic properties for a long time. In this work, we report a very simple synthetic method of carbon nanotubes (CNTs) encapsulated ferromagnetic cobalt nanoclusters by catalytic decomposing benzene over Co/silica-gel nano- scale catalysts. Unlike previous reports, the catalysts do not need to be pre-reduced prior to the forming of CNTs encapsulated cobalt nanoclusters, thus, the advantage of this method is that CNTs encapsulated ferromagnetic nanoclusters can be produced in one step, at a relatively low cost. High-resolution Transmission electron microscopy (HRTEM), selected area electron diffraction (SAED) patterns and energy dispersive X-ray spectroscopy (EDS) were used to characterize the microstructures and compositions of the products. Experimental results revealed that the encapsulated Co was always presented as high temperature alpha-Co phase with fee structure, which frequently consists of twinned boundaries and stacking faults. Based on the experimental results, a possible growth mechanism of the CNTs encapsulated Co nanoclusters was proposed. Magnetic property measurements showed that the CNTs encapsulated cobalt nanoclusters possessed excellent magnetic properties.