Mullite-based iron nanocomposites were prepared by the reduction of a mullite-iron oxide solid solution and successive hot pressing. The solid solution was obtained from the heat treatment of diphasic gel by sol-gel method. Some of the α-iron nanoparticles have an intra-granular structure just after reduction. Mechanical properties are strongly affected by the content of iron. Low iron content is beneficial to strengthening while high iron content can improve the fracture toughness. Furthermore, the nanocomposites also behave ferromagnetic properties at room temperature.