Conducting polyaniline/𝛾-Fe2O3 (PANI/FE) composites have been synthesized using an in situ deposition technique by placing fine-graded 𝛾-Fe2O3 in a polymerization mixture of aniline. The composites are characterized by using scanning electron microscopy (SEM), X-ray diffraction (XRD) and infrared (IR) spectroscopy. The electrical properties such as d.c. and a.c. conductivities are studied by sandwitching the pellets of these composites between the silver electrodes. It is observed that the conductivity increases up to a composition of 20 wt.% of 𝛾-Fe2O3 in polyaniline and decreases thereafter. The initial increase in conductivity is attributed to the extended chain length of polyaniline, where polarons possess sufficient energy to hop between favourable sites. Beyond 20 wt.% of 𝛾-Fe2O3 in polyaniline, the blocking of charge carrier hop occurs, reducing conductivity values. The magnetic properties such as hysteresis characteristics and normalized a.c. susceptibility are also measured, which show a strong dependence on content of 𝛾-Fe2O3 in polyaniline. Because of superparamagnetic behaviour of these composites, they may find extensive technological applications, especially for absorbing and shielding applications in microwave frequencies.