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Magnetic properties of cobalt clusters (20 N 200) were studied in molecular beams. The magnetization of cobalt clusters is studied at a broad range of temperatures, magnetic fields and clusters sizes. It is shown that the agnetization of ferromagnetic clusters in a cluster beam can be understood as an adiabatic process using the avoided crossing theory. Besides the ground state that bears magnetic moment of about 2 Bohr magneton per atom, an excited state that has 1 Bohr magneton per atom was discovered for every cobalt cluster observed. The energy separations between the two states was investigated by photo-ionization experiments. The ionization threshold shows that the energy gap between the two states is on the order of 0.1 eV for small clusters (N 100) and vanishes for larger clusters. Experiments also show that the polarizability of the excited state is lower than that of the ground state, which indicates a significant electronic tructure difference between the two states. Two states are also found for iron clusters (20 N 200) for which the magnetic moments per atom are about 3 Bohr magneton for the ground state and 1 Bohr magneton for the excited states. This explains the fractional magnetic moments as well as the local magnetic order observed above the Curie temperatures for iron group ferromagnets. Further experiments show two states for manganese clusters for which the ground state has magnetic moment of 1 Bohr magneton per atom in about the same size range. This suggests that the two states are a universal phenomenon of 3d transition metal clusters, which originate from the interaction between 3d and 4s electrons.