Structural transformation in γ-Fe2O3 nanocrystals (about 1Onm) with dodecyl benzene sulfonic (DBS) coated is studied by using high-pressure energy dispersive x-ray diffraction of synchrotron radiation and high-resolution transmission electron microscopy (HRTEM). Relative to the bulk crystal, the transition pressure showed a decrease while the compressibility increases significantly up to 375 (±9 GPa). HRTEM picture confirmed that there is surface cladding surrounding nanocrystals due to DBS, which formed new special boundaries between nanocrystals and should be different from the ordinary grain boundaries. The experimental results imply that the surface layers of γ-Fe2O3 nanocrystals have strong effect on the compressibility.