Particles of α-iron of 2–10 nm size have been prepared by chemical synthesis, stabilized and dispersed into a polymer matrix. The composite was characterized using high-resolution transmission electron microscopy. The optical Faraday rotation of the polymer composite, measured at 633 nm, was approximately 1.2° T -1 . The Verdet constant measured by the Faraday rotation of the polymer composite at 633 nm is 0.36 min Oe -1 cm -1 .