The Fe2O3/Ag core-shell composite nanoparticles were prepared via a simple method at low temperature. The structure of Ag-Fe2O3 core-shell composite nanoparticles was confirmed by XRD, TEM and UV spectra. The results show that the size distributions of the Ag nanocomposites averaged 35 nm, with a thickness of 7.5 nm or 15 nm of Ag layer. Magnetic measurements show that the composite nanoparticles exhibited a typical ferromagnetic behavior, a specific saturation magnetization of 0.98 (A·m2)·kg-1 and an intrinsic coercivity of 8.48×103 A/m at room temperature. The electric conductivity of Fe2O3/Ag core-shell composite nanoparticles is up to 0.62 S/cm. Through this method can obtain higher yield of Fe2O3/Ag core-shell composite nanoparticles, and this method also can control the size and composite particle dispersion easily. It will have a broad application prospects in catalyst, medicine, photoelectric etc