IF-Mo1-xNbxS2 nanoparticles have been synthesized by a vapor-phase reaction involving the respective metal halides with H2S. The IF-Mo1-xNbxS2 nanoparticles, containing up to 25% Nb, were characterized by a variety of experimental techniques. Analysis of the powder X-ray powder diffraction, X-ray photoelectron spectroscopy, and different electron microscopy techniques shows that the majority of the Nb atoms are organized as nanosheets of NbS2 within the MoS2 host lattice. Most of the remaining Nb atoms (3%) are interspersed individually and randomly in the MoS2 host lattice. Very few Nb atoms, if any, are intercalated between the MoS2 layers. A sub-nanometer film of niobium oxide seems to encoat the majority of the nanoparticles. X-ray photoelectron spectroscopy in the chemically resolved electrical measurement mode (CREM) and scanning probe microscopy measurements of individual nanoparticles show that the mixed IF nanoparticles are metallic independent of the substitution pattern of the Nb atoms in the lattice of MoS2 (whereas unsubstituted IF-MoS2 nanoparticles are semiconducting). Furthermore the IF-Mo1-xNbxS2 nanoparticles are found to exhibit interesting single electron tunneling effects at low temperatures.