Synthesis of nanoparticles of Ni-Zn ferrite dispersed in aniline formaldehyde copolymer using a room temperature route and the effect of heat treatment on these samples were studied using XRD, FTIR spectroscopy, 5 7 Fe Mossbauer spectroscopy and TEM microscopy. The results show the formation of nanosized particles of Ni-Zn ferrite in the polymer matrix at room temperature. On pyrolysis, the Ni-Zn ferrite phase persists up to 500 o C. However, heating of composites to 700 o C results in the partial reduction of the spinel ferrite leading to the formation of Ni-Fe alloy under ambient conditions and complete reduction of the alloy on heating in inert atmosphere.