Microsoft has officially removed support for formatting floppies to 720K since Windows XP. For majority of people floppies (especially 720K ones) have long been a thing of the past. However, if you do find yourself in a situation where you need a floppy to be formatted to 720K, you can still do it through command line.
Open command line (Start -> Run -> cmd), insert a floppy, and enter the following in command line:
FORMAT A: /T:80 /N:9
This will format your floppy to 720K. Couple of things to be aware – first, in order to be able to format floppy disk to 720K, you need to cover the hole in lower right corner (you can use masking tape), and second, if you are using a USB floppy drive, this might not work due to most USB floppy drives not supporting reading / writing 720K format.
Tech@Play 
Excellent – I amold school computer guy, I used Spectrums and Ataris etc.. I suppose the T 80 means Tracks, but what does N 9 mean?
..yours, Paul, Liverpool UK ENGLAND
Hi Paul, /N parameter specifies number of sectors per track.
Thank you for this! I have a commercial embroidery machine that uses 720 floppies. Such a pain however you figure it. When ms changed that in xp, it became even MORE of a pain. I am grateful to you. =)
how about creating a bootable 720k floppy? I have tried “just copying” the contents of a boot disk to a fresh 720k floppy (with hidden files included) but that doesn’t work. I tried:
format a: /t:80 /n:9 /s
but it decided /s was an invalid parameter.