The structure and magnetic properties of fine Ni nanoparticles (∼65 nm diameter) having a spontaneous surface oxide layer have been studied. The particles were prepared by the chemical reduction of nickel ions in an aqueous medium, with sodium borohydride as the reducing agent. X-ray diffraction (XRD), transmission electron microscopy, and magnetization measurements (M-H plots and field cooled/zero field cooled curves) have been used for characterizing the samples. No detectable change is observed in the M-H curves or in the XRD patterns of the "as prepared" sample and the sample annealed in air at 573 K. We have indexed both these patterns as Ni in a tetragonal crystal structure with lattice parameters a = 0.4905 nm, c = 0.5330 nm and a = 0.4890 nm, c = 0.5310 nm for the "as prepared" and 573 K annealed sample, respectively. This is a new report about the formation of Ni in a modified crystal structure. The M-H curves of both the samples show a clear hysteretic behavior but do not saturate, thereby suggesting the existence of both ferromagnetic and paramagnetic components in the magnetization. Large coercivity values ≈ 123 Oe as compared to 6 Oe in bulk Ni have been obtained. The magnetization results have been analyzed in correlation with X-ray diffraction and microstructure and satisfactorily explained on the basis of a core-shell model, where we consider each particle as a magnetically heterogeneous system consisting of a ferromagnetic core of Ni and an antiferromagnetic/paramagnetic shell of NiO. © 2004 American Institute of Physics.