The DBSA-PANI-Fe composite powder with 50wt% of Fe nanoparticles was prepared by mechanically mixing the DBSA-doped polyaniline powder and Fe nanoparticles. The composite powder was compacted to pellets and the pellets were annealed in vacuum at 443,493,543, and 593 K for 60 and 120 min. The conductivity of the pellet increases markedly with increasing the annealing temperature up to 493 K, and then decreases with further increasing the annealing temperature. When the pellet was annealed at 493 K for 60 min, the increment of conductivity reaches a maximum value, and the conductivity is 2.6 times as large as that of the pellet unannealed. The conductivities of the pellets annealed under the conditions of 543 K/120 min, 593 K/60 min, and 593 K/120 min are lower than the conductivity of the pellet unannealed. For all the pellets, the variation in conductivity with temperature reveals that the charge transport mechanism can be considered to be 1-D variable-range-hopping (1-D VRH). The composite pellet shows a magnetic hysteresis loop independent of the annealing condition. The saturation magnetization is about 5.4×10⁴ emu/kg. The saturation field and the coercivity are estimated to be 4.38×10⁵ and 3.06×10⁴ A/m, respectively. The crystalline structure ofFe nanoparticles in the composites does not change with the annealing condition. The annealing condition cannot destroy the polymer backbones.