In this study, novel ferromagnetic Ni‐containing silicon oxycarbide (SiOC–Ni) was successfully fabricated from a base polysiloxane (PSO) with the addition of nickel 2,4‐pentanedionate. The resultant SiOC–Ni nanocomposite consists of in situ formed Ni nanocrystallites with a small amount of NiO uniformly dispersed in the amorphous SiOC matrix, and the corresponding nanocrystallite size increases with the increase of the pyrolysis temperature. The formation of nickel silicides (NixSiy) is completely suppressed by the effect of water vapor during the pyrolysis. The fundamental phase evolution process and mechanisms are explained. In an argon atmosphere, the SiOC–Ni materials pyrolyzed at 900°C are stable up to 1000°C with less than 6 wt% weight loss; they exhibit desirable electrical conductivity up to ~900°C with the highest electrical conductivity at ~247 S/m. This series of SiOC–Ni materials also demonstrates exciting ferromagnetic behaviors. Their new semiconducting behavior with soft ferromagnetism presents promising application potentials for magnetic sensors, transformers, actuators, etc.