Ultrafine cobalt particles in AlMCM41 silica tubes have been synthesized by ion exchange and the reduction with sodium borohydride. The role of this stable host matrix of AlMCM41 silica is to prevent agglomeration of the magnetic particles attached to the walls of AlMCM41 silica pores. The size of the host pores naturally limits the particle dimensions and thus improves their size distribution. Both magnetic susceptibility measurements and transmission electron microscopy (TEM) show a narrow distribution size of the nanoparticles. Well controlled insertion of the magnetic material to the host channel excludes formation of bulk particles outside the host material grains, which was confirmed by the TEM studies. X-ray diffraction data did not show peaks corresponding to a crystalline cobalt, but this maybe due to small size of particles and their relatively small volume fraction. The content of Co in the AlMCM41 host was measured using both magnetic measurements and elemental analysis.