Evaporation-gas-aggregation (EGA) co-deposition for the preparation of thin films of Fe clusters embedded in a silver matrix is developed in this paper. Transmission electron microscope and electron diffraction investigations and X-ray energy spectrum show that Fe clusters are well encapsulated in silver coatings and are in the form of body centred cubic Fe and face centred cubic Ag in as-prepared samples. Vibrating sample magnetometer measurements reveal that samples show superparamagnetic behaviour and saturation magnetization increases with decreasing test temperature. At lower temperature, the coercivity is much higher than that of bulk alpha-Fe, and it decreases with increasing test temperature.