The polymerization of pyrrole in an aqueous medium in the presence of nanodimensional Fe 3 O 4 using ammonium peroxodisulphate (APS) as oxidant results in the formation of polypyrrole–Fe 3 O 4 nanocomposites. Characterization of the composites was carried out by Fourier transform infrared spectroscopy, x-ray diffraction, scanning and transmission electron microscopy. The magnetization data exhibit a small hysteresis loop at room temperature. The Mössbauer spectra at room temperature reveal the doublet structure, characteristic of the superparamagnetic phase in magnetite (Fe 3 O 4). The composite samples reveal ordered semiconducting behaviour. Polypyrrole is the dominating component in the transport process of the nanocomposites. A very large dielectric constant of about 11 000 at room temperature has been observed. The interface between polypyrrole and Fe 3 O 4 plays an important role in producing a large dielectric constant in the composite.