Novel magnetic behavior occurs when interactions between nanoscale phases dominate. In particular, interactions between hard and soft magnetic phases lead to dramatically improved energy densities. However, relevant interaction lengths make it necessary that the soft magnetic phase be on the order of 6-8 nanometers. Achieving this level of nanostructuring using conventional processing routes is virtually impossible. Here, we use a novel approach to generate phases with length scales never before achieved in granular systems. With appropriate ratios of Fe and Pt atoms, the Fe-Pt alloys naturally separate into hard magnetic FePt and soft magnetic Fe3Pt phases. When we geometrically confine the alloy to sub-10 nm clusters produced by inert gas condensation and avoid large-scale coalescence, the phase evolution occurs over a few nanometers, ensuring complete magnetic coupling between the two phases. The figures show a model structure of a two-phase cluster and a high-resolution transmission electron micrograph of the two-phase structure, where the white lines have been drawn to delineate the different phases. The two-phase clusters achieved an energy density that was more than twice that of single-phase hard magnetic clusters. This research is supported by the National Science Foundation, Division of Materials Research, Materials Research Science and Engineering Program, Grant 0213808.