Efficient hydrogen evolution reaction (HER) through effective and inexpensive electrocatalysts is a valuable approach for clean and renewable energy systems. Here, single-shell carbon-encapsulated iron nanoparticles (SCEINs) decorated on single-walled carbon nanotubes (SWNTs) are introduced as a novel highly active and durable non-noble-metal catalyst for the HER. This catalyst exhibits catalytic properties superior to previously studied nonprecious materials and comparable to those of platinum. The SCEIN/SWNT is synthesized by a novel fast and low-cost aerosol chemical vapor deposition method in a one-step synthesis. In SCEINs the single carbon layer does not prevent desired access of the reactants to the vicinity of the iron nanoparticles but protects the active metallic core from oxidation. This finding opens new avenues for utilizing active transition metals such as iron in a wide range of applications.