Composites consisting of nanometer-sized nickel–zinc ferrite and α-iron were prepared by subjecting micrometer-sized ferrite particles to a reduction treatment in the presence of α–Fe2O3. The materials were characterized by x-ray diffraction, electron microscopy, Mossbauer spectroscopy, and magnetization measurements. A wide range of saturation magnetization and coercivity can be obtained by changing the reduction schedule. The reduction process appears to break down the particle size of the precursor powder of nickel–zinc ferrite.