Synthesis of highly crystallized mullite has been achieved at a temperature of 1000°C by sol-gel technique in presence of iron ions of different concentrations. XRD, FTIR spectroscopy, FESEM, LCR meter and HyMDC, Hysteresis measurement instrument, characterized samples. Mullite formation was found to depend on the concentration of the ions. The dielectric properties (dielectric constant, tangent loss and a.c. conductivity) of the composites have been measured, their variation with increasing frequency and concentration of the doped metal was investigated, and magnetic behavior was observed from the hysteresis loops. All the experimentations were performed at the room temperature. The composite showed a minimum dielectric constant of 3.26 at 0.002(M) concentration of iron at 1.5 MHz and the magnetic properties of nanocomposites suggest that the iron nanoparticles show hysteresis loop in 0.10 M, 0.15 M and 0.20 M , hence acts like typical paramagnetic materials as is the case for other iron-doped ferrisilicates.