The examination of nanoparticles allows study of some processes and mechanisms that are not as easily observed for films or other types of studies in which sample preparation artifacts have been the cause of some uncertainties. Microstructure of iron nanoparticles passivated with iron oxide shell was studied using high-resolution transmission electron microscopy and high-angle annular dark-field imaging in aberration-corrected scanning transmission electron microscopy. Voids were readily observed on both small single-crystal α-Fe nanoparticles formed in a sputtering process and the more complex particles created by reduction of an oxide by hydrogen. Although the formation of hollow spheres of nanoparticles has been engineered for Co at higher temperatures [Y. Yin, R. M. Riou, C. K. Erdonmez, S. Hughes, G. A. Somorjari, and A. P. Alivisatos, Science 304, 711 (2004)], they occur for iron at room temperature and provide insight into the initial oxidation processes of iron. There exists a critical size of ∼8nm for which the iron has been fully oxidized, leading to a hollow iron-oxide nanoparticle. For particles larger than the critical size, an iron/iron-oxide core-shell structure was formed and voids reside at the interface between the oxide shell and the iron core. The present observation provides new insight for tailoring of metal/metal-oxide core-shell structured nanoparticles for applications related to optics, magnetism, and nanoelectronics.