Particulate matter (PM) that is composed of a complex mixture of organic compounds, soot, transition metals, sulfates, nitrates, and other trace elements has been associated with a range of adverse health effects. The effect of the separate components of PM and their interaction with each other is important in order to understand the origins of toxicity in these materials. Iron and soot are common environmental contaminants occurring in ultrafine particulate matter in the air, and have been experimentally generated, in a manner simulating high-temperature, industrial processes, through the combustion of iron pentacarbonyl in a mixture of acetylene and ethylene. Nanoprobe electron energy-loss spectroscopy (EELS) in the transmission electron microscope was used to collect Fe L3:L2 white line-intensity ratios from the interiors and surfaces of iron oxide nanoparticles present in samples generated under low and high soot conditions. This ratio is sensitive to any change in the iron oxidation state, and indicated that iron oxide nanoparticles co-generated with large quantities of soot during combustion processes show a subsurface layer (of thickness 2–3 nm) of decreased iron oxidation state. A quantitative analysis of the iron L32 EELS ionization edge measured in nanoprobe mode indicated that in these particles, the oxidation state of iron at the surface is decreased from Fe3+ to Fe2+, possibly explaining the toxicity of these materials in the respiratory tract. The application of EELS to understanding the nanoscale distribution of the various components and their chemical interactions in these samples, and correlation of these results with acute respiratory toxicity studies of the laboratory-generated particulate matter, are discussed.