A simple sol-gel method followed by a thermal annealing in an oxygen atmosphere was employed to prepare nickel oxide (NiO) nanoparticles from the precursor, nickel acetate. The structural characterization by X-ray diffraction confirms a cubic phase with high crystallinity and no detectable impurity. Scanning electron microscopy showed the nanoparticles to be spherical in shape with a uniform distribution for annealing at 800 °C. The transformation of the precursor to NiO and the removal of hydroxyl content after annealing were also confirmed by Raman and Fourier transform infra-red spectroscopy (FT-IR). The phonon-magnon (1P + 1 M) and the two-magnon (2 M) peak observed in the Raman spectra are signatures of the magnetic properties. The intensity decrease of the two-magnon mode with decreasing size is correlated to an increasing ferromagnetic behaviour. This type of behaviour is also supported by the magnetic hysteresis loop.