Abstract: The growth mechanism of carbon nanomaterials by arc discharge in water or liquid nitrogen was investigated using a special arc discharge apparatus. Highresolution transmission electron microscopy was used to observe and analyze the products. Results indicated that multiwalled carbon nanotubes (MWCNTs) and carbon onions can be produced by arc discharge in water and liquid nitrogen respectively. Singlewalled carbon nanohorns can be produced by arc discharge in liquid nitrogen, and cobalt encapsulated carbon nanoparticles can be produced by cobalt catalyzed carbon arc discharge in water. The liquids acted as quenching walls for the nucleation and growth of carbon nanomaterials, resulting in the formation of different forms of carbon nanomaterials. A cross alternating magnetic field with a frequency 5Hz can affect the nucleation of nanomaterials to form MWCNTs or carbon onions because nucleation time is longer than the periodicity of the magnetic field. Based on the experimental phenomena, a primary physical model was proposed to interpret the growth of nanomaterials by arc discharge in liquids.