Electron energy loss spectroscopy has been performed on nanometer-sized alpha- and gamma-iron crystallites embedded in single-crystal MgO films prepared by vacuum-codeposition of iron and MgO. The Fe L3/L2 white line ratio of gamma-ion crystallites was found to be slightly larger than the white line ratio of alpha-iron This suggest that nm-sized gamma-iron crystallites embedded in single-crystal MgO are in a high-spin state similar to alpha-iron, and is consistent with previous magnetization measurements of gamma-iron/MgO composite films.