Cobalt oxide (CoOx) particles within faujasite zeolites have been synthesized by a procedure comprising (i) ion-exchange of cobalt ions into the zeolite, (ii) precipitation of cobalt ions with sodium hydroxide within the supercages of the zeolite, and (iii) calcination. The materials are characterized by XRD, nitrogen sorption, XPS, TEM-EDS, H2-TPR, and O2-titration. The concentration of sodium hydroxide for precipitation and the temperature for calcination are found to be critical in controlling the locations of the CoOx particles. With appropriate conditions, the CoOx particles formed are located and encapsulated in the supercages of faujasite zeolites. The sizes of the CoOx particles are in the range of 0.7-3nm with a maximum distribution of 1.3-1.5nm. These particles exist mainly in the state of CoO. On the other hand, higher calcination temperature or higher concentration of sodium hydroxide may lead to the formation of larger Co3O4 particles located outside the supercages of the faujasite zeolites. The CoOx particles encapsulated in the supercages exhibit a broad reduction peak and can be partly reduced to metallic cobalt at temperatures as low as 573K, while the cobalt cations exchanged into the zeolites can only be reduced at temperatures higher than 773K. The metallic cobalt formed by the reduction of cobalt oxide within the supercage exhibits superior catalytic activity in Fischer-Tropsch synthesis.