Nanocrystalline CoSe2 was successfully synthesized in the temperature range 90-170 degreesC through a hydrothermal method. All the reflections in the XRD pattern of CoSe2 could be indexed as an orthorhombic system with cell parameters a = 3.589, b = 4.838, and c = 5.713 Angstrom. TEM images of the products showed a rod-like morphology. Disproportionation products of selenium in alkaline aqueous solution provide a convenient chalcogen source and make possible the synthesis of transition-metal selenides under hydrothermal conditions. The mechanism of the formation of CoSe2 is proposed.