Superparamagnetic carbon-encapsulated iron carbide nanoparticles (NPs), Fe₇C₃@C, with unique properties, were produced from pure ferrocene by high pressure–high temperature synthesis. These NPs combine the merits of nanodiamonds and SPIONs but lack their shortcomings which limit their use for biomedical applications. Investigation of these NPs by X-ray diffraction, electron microscopy techniques, X-ray spectroscopic and magnetic measurement methods has demonstrated that this method of synthesis yields NPs with perfectly controllable physical properties. Using magnetic and subsequent fractional separation of magnetic NPs from residual carbon, the aqueous suspensions of Fe₇C₃@C NPs with an average particle size of ∼25 nm were prepared. The suspensions were used for in vitro studies of the interaction of Fe₇C₃@C NPs with cultured mammalian cells. The dynamics of interaction of the living cells with Fe₇C₃@C was studied by optical microscopy using time-lapse video recording and also by transmission electron microscopy. Using novel highly sensitive cytotoxicity tests based on the cell proliferation assay and long-term live cell observations it was shown that the internalization of Fe₇C₃@C NPs has no cytotoxic effect on cultured cells and does not interfere with the process of their mitotic division, a fundamental property that ensures the existence of living organisms. The influence of NPs on the proliferative activity of cultured cells was not detected as well. These results indicate that the carbon capsules of Fe₇C₃@C NPs are air-tight which could offer great opportunities for future use of these superparamagnetic NPs in biology and medicine.