This paper reports on the in-situ synthesis, optimization, characterization and cytotoxicity tests of multi-layer graphene (MLG) encapsulated Fe/Fe2O3 nanoparticles (Fe/Fe2O3@C core-shell nanostructures) by spray drying-assisted chemical vapor deposition (CVD) using iron-nitrate/silica-based precursors. The influences of CVD reaction temperature, holding time, CH4/H2 gas flows and pressure on the synthesis of MLG encapsulated Fe/Fe2O3 nanoparticles were investigated. CVD-synthesized powders were purified using acid leaching to remove residual silica and probable uncoated Fe/Fe-oxide phases. XRD analyses revealed the presence of FCC (Fe,C), BCC Fe, graphite/graphene and trace amount of Fe2O3 phases. Raman spectra confirmed the existence of MLG shells. TEM indicated that MLG (from at least 3 to maximum of 35 layers) wrapped around the metallic cores ranged be-tween 4 and 85 nm. Purification of nanoparticles did not degrade, dissolve or create discontinuity on the MLG structure. VSM measurements showed that nanoparticles obtained from the optimized conditions (900 ?, 100 ml/min CH4/H2, 50 mbar) had a soft ferromagnetic behavior with low saturation magnetization (-85 emu/g) and coercivity (-552 Oe) values. Optimized MLG encapsulated Fe/Fe2O3 nanoparticles were successfully suspended in water using a poly(acrylic acid) coating. Aqueous MLG encapsulated Fe/Fe2O3 nanoparticles were cytocompatible below 100 mg/ml at short incubation times, and showed the potential to be used in biomedical applications. (c) 2022 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).