We report the chemical synthesis of Fe-core/Au-shell nanoparticles (Fe/Au) by a reverse micelle method, and the investigation of their growth mechanisms and oxidation-resistant characteristics. The core-shell structure and the presence of the Fe and Au phases have been confirmed by transmission electron microscopy, energy dispersive spectroscopy, x-ray diffraction, Mössbauer spectroscopy, and inductively coupled plasma techniques. Additionally, atomic-resolution Z-contrast imaging and electron energy loss spectroscopy in a scanning transmission electron microscope have been used to study details of the growth processes. The Au-shells grow by nucleating on the Fe-core surfaces before coalescing. First-order reversal curves, along with the major hysteresis loops of the Fe/Au nanoparticles have been measured as a function of time in order to investigate the evolution of their magnetic properties. The magnetic moments of such nanoparticles, in the loose powder form, decrease over time due to oxidation. The less than ideal oxidation-resistance of the Au shell may have been caused by the rough Au surfaces. In a small fraction of the particles, off-centered Fe cores have been observed, which are more susceptible to oxidation. However, in the pressed pellet form, electrical transport measurements show that the particles are fairly stable, as the resistance and magnetoresistance of the pellet do not change appreciably over time. Our results demonstrate the complexity involved in the synthesis and properties of these heterostructured nanoparticles.