Nanoparticles of Co3O4 and CoO are of paramount importance because of their chemical properties propelling their applications in catalysis and battery materials, and because of their intriguing magnetic properties. Here we elucidate the transformation of Co3O4 nanoparticles to CoO into nanoscale detail by in situ heating in the transmission electron microscope (TEM), and we decipher the energetics and magnetic properties of the Co3O4/CoO interface from first principles calculations. The transformation was found to start at a temperature of 350 °C, and full conversion of all particles was achieved after heating to 400 °C for 10 minutes. The transformation progressed from the surface to the center of the nanoparticles under the formation of dislocations, while the two phases maintained a cube-on-cube orientation relationship. Various possibilities for magnetic ordering were considered in the density functional theory (DFT) calculations and a favorable Co3O4/CoO {100}/{100} interface energy of 0.38 J m-2 is predicted for the lowest-energy ordering. Remarkably, the DFT calculations revealed a substantial net ferromagnetic moment originating from the interface between the two antiferromagnetic compounds, amounting to approximately 13.9 μB nm-2. The transformation was reproduced ex situ when heating at a temperature of 400 °C in a high vacuum chamber. This journal is @en