Ultrafine Fe, Fe–Ni, and Ni particles were prepared by using the hydrogen plasma-metal reaction method in a mixture of H2 and Ar of 0.1 MPa. The particles were characterized by x-ray diffraction, transmission electron spectroscopy, energy disperse spectroscopy, chemical analysis, and Mössbauer spectroscopy. In contrast with bulk Fe–Ni alloys, the distinguishing features in corresponding ultrafine particles are that two phases with fcc and bcc structures coexist in a wide composition range. Ultrafine Fe–Ni particles have higher resistance to oxidation than Fe and Ni particles. The mechanism of forming particles was analyzed by means of structural and magnetic measurements. It was found that quenching is a dominant mechanism for forming paramagnetic particles. Hyperfine interactions were studied by Mössbauer spectroscopy in comparison with those in bulk Fe–Ni alloys.