To investigate the effect of the parameters of the plasma arc discharge process on the particle formation and particle characteristics of the iron nano powder, the chamber pressure, input current and the hydrogen volume fraction in the powder synthesis atmosphere were changed. The particle size and phase structure of the synthesized iron powder were studied using the FE-SEM, FE-TEM and XRD. The synthesized iron powder particle had a core-shell structure composed of the crystalline $alpha$-Fe in the core and the crystalline $Fe_3O_4$ in the shell. The powder generation rate and particle size mainly depended on the hydrogen volume fraction in the powder synthesis atmosphere. The particle size increased simultaneously with increasing the hydrogen volume fraction from 10% to 50%, and it ranged from about 45nm to 130 nm.