Nanocrystalline Fe powders were synthesized by transmetallation reaction and embedded in silica to form Fe–SiO 2 nanocomposite. Thermomagnetic study of the as-prepared Fe sample indicates the presence of Fe 3 O 4 and Fe particles. Oxidation studies of Fe and Fe–SiO 2 show an increased thermal stability of Fe–SiO 2 nanocomposite over pure Fe. The Fe–SiO 2 shows an enhanced oxidation temperature (i.e., 780K) and a maximum saturation magnetization value of (135emu/g) with 64wt.% of Fe content in silica. Electrical and dielectric behaviour of the Fe–SiO 2 nanocomposite has been investigated as a function of temperature and frequency. Low frequency ac conductivity and dielectric constants were found to be influenced by desorptions of chemisorbed moisture. High saturation magnetization, thermal stability, frequency-dependent conductivity and low power loss make Fe–silica a promising material for high frequency applications.