MnAlC nanoparticles were synthesized by plasma arc-discharge method. Heat treatment of these nanoparticles at temperature from 400 to 600 °C resulted in the formation of the ferromagnetic τ-phase. Most of the nanoparticles had nearly spherical shape, smooth surface and core/shell structure. The shells of the nanoparticles mainly consisted of Al2O3 and a small amount of Mn oxides. Though the saturation magnetization of MnAlC nanoparticles was lower than that of bulk samples due to the effect of nonmagnetic phases (β, γ2 and Mn3AlC) and the oxide shell, the highest coercivity, up to 5.6 kOe in the MnAlC magnets, was achieved when annealed at 500 °C for 30 min.