Ba3Co2Fe24O41 nanocrystals are synthesized through a stearic acid sol-gel method. The reaction temperatures are dramatically lower than that of the conventional ceramic method. The nanocrystalline powders obtained at 750 degrees C were spherical in shape with grain sizes in the range 15-25 nm and become a plate-like form when the heat-treatment temperature increased. The magnetic properties of these samples are different from those of the bulk Z-type hexagonal ferrite with a lower specific saturation magnetization. This phenomenon can be attributed to the existing of a nonmagnetic layer existing on the surface of the particles. The higher value of the coercivity force is obtained when the particle sizes approximately are equal to 90 nm and assume a single-domain character. The surface composition of the nanocrystalline Co-2-Z hexagonal ferrite is different from that of the bulk counterpart material with a higher content of the Ba element and Co element.