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Abstract: Using the carbon nanotube (CNT) arrays embedded in anodic aluminum oxide (AAO) template as an electrode, large amounts of Ni nanoparticles have been encapsulated into the CNTs by an alternating current (AC) electrodepostion technique. As deposited Ni nanoparticles with a typical size of 50–60 nm randomly nucleated on the CNT walls, thus inhomogeneously distributed in the CNTs. After annealing at 600 ∘C, the nanoparticles transformed into quasi-spherical structures with the diameter increasing to 60–80 nm. The quasi-spherical nanoparticles were aligned in orderly rows along the axis of the CNT channels. Magnetic hysteresis measured at 5 K showed that the coercivity was 450 Oe for the as-deposited sample and 385 Oe for annealed sample, with the applied magnetic field parallel with the CNT’s axis. The structures and magnetic properties were discussed for both as-deposited and annealed samples. [Copyright &y& Elsevier]