A method is proposed to synthesize oxide nanoparticles in insulators, using metal-ion implantation and following thermal oxidation, which introduces less damage compared to the sequential implantation of metal ions and oxygen ions. Ni-oxide nanoparticles are formed in O2 gas flow at ∼800°C for 1h, through thermal oxidation of Ni metal nanoparticles, which were introduced in SiO2 by charging-free negative ion implantation of 60keV. After the oxidation, optical absorption in the visible region, which is due to Ni metal nanoparticles in the specimen, disappears, and a steep absorption edge of insulator NiO appears around ∼4eV. Simultaneously, the large magnetization of Ni metal nanoparticles changes to a weak magnetization of antiferromagnetic NiO nanoparticles. The nanoparticle formation is confirmed by transmission electron microscopy observation.