The electronic structure of cobalt nanocrystals suspended in liquid as a function of size has been investigated using in situ X-ray absorption and emission spectroscopy. A sharp absorption peak associated with the ligand molecules is found that increases in intensity upon reducing the nanocrystal size. X-ray Raman features due to d−d and to charge-transfer excitations of ligand molecules are identified. The study reveals the local symmetry of the surface of ε-Co phase nanocrystals, which originates from a dynamic interaction between Co nanocrystals and surfactant + solvent molecules.