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Metal clusters and nanoparticles (NPs) have been studied intensively due to their unique chemical, physical, electrical, and optical properties, resulting from their dimensions, which provided host of applications in nanoscience and nanotechnology. Formation of new materials by embedding NPs into various matrices (i.e. formation of nanocomposites) further expands the horizon of possible application of such nanomaterials. In the last few decades, the focus was put on the formation of metallic and metal oxide NPs via a so-called gas aggregation nanoparticle source employing magnetron sputtering (i.e. Haberland concept). In this paper, an overview is given of the recent progress in formation and deposition of NPs by the gas aggregation method. Examples range from noble metals (Ag, Au) through reactive metals (Al, Ti) to Si and the respective oxides. Emphasis is placed on the mechanism of nanoparticle growth and the resulting properties. Moreover, kinetic Monte Carlo simulations were developed to explain the growth mechanism and dynamics of nanoparticle formation depending on the experimental conditions. In addition, the role of trace amounts of reactive gases and of pulsed operation of the plasma on the nucleation process is addressed. Finally, the treatment of the NPs in the plasma environment resulting in nanoparticle charging, morphological and chemical modifications is discussed.