Liquid metal (LM)‐based magnetic fluids have attracted attention due to their rapid magnetic response, flexibility, and maneuverability. However, the nonwettability at the interface between metal particles and LM due to surface energy mismatch makes it challenging for metal particles to penetrate the LM oxide layer. Here, a strategy for mixing magnetic iron particles into LM through a reactive wetting mechanism is proposed. To address the inherent nonwettability at the interface between Fe particles and LM, FeGa2O4 is synthesized as a shell of Fe particles to enhance compatibility between Fe particles and LM. In particular, the wetting behavior of the FeGa2O4 shell on the interface between Fe@FeGa2O4 and LM is explained and validated based on the contact angle theory and density functional theory. Moreover, the mixture of Fe@FeGa2O4 particles into the LM enhances the rheological properties of the composite, effectively overcomes the inherent limitation of the low mechanical strength of LM, and improves the magnetic, electrical, and thermal properties of LM. Furthermore, studies on the adhesion mechanism of LM composites indicate that Fe@FeGa2O4 particles carrying more oxides into LM are crucial factors for adhesion. Given these notable advantages, LM‐based magnetic composites have shown tremendous potential in flexible electronics, soft robotics, and lightweight LM thermal interface materials.