Magnetic polyaniline (PANI) polymer nanocomposites (PNCs) reinforced with magnetite (Fe3O4) nanoparticles (NPs) have been successfully synthesized using a facile surface initiated polymerization (SIP) method. The chemical structures of the PANI/Fe3O4 PNCs are characterized by Fourier transform infrared (FT-IR) spectroscopy. The thermal stability of the PANI/Fe3O4 PNCs is performed by thermogravimetric analysis (TGA). Both transmission electron microscopy (TEM) and scanning electron microscopy (SEM) are used to characterize the morphologies of the PANI, Fe3O4 nanoparticles (NPs) and the PNCs. X-ray diffraction (XRD) shows a significant effect of the Fe3O4 NPs on the crystallization structure of the formed PANI. The dielectrical properties of these PNCs are strongly related to the Fe3O4 nanoparticle loadings and unique negative permittivity is observed in all the samples. Temperature dependent resistivity analysis from 50 to 290 K reveals a quasi 3-dimension variable range hopping (VRH) electron conduction mechanism for the nanocomposite samples. The PNCs do not show hysteresis loop with zero coercivity, indicating the superparamagnetic behavior at room temperature. The PNCs with 30 wt% Fe3O4 NP loading exhibit a larger positive magnetoresistance (MR = 95%) than 53% of the pure PANI.