Abstarct: In this thesis ZnO, α-Fe2O3 and ZnO/Fe2O3 nanocomposites powders with weight ratios (1:0/5), (1: 1) and (1: 2) were prepared using hydrothermal method. Then the effects of different annealing temperatures on properties of ZnO/Fe2O3 (1:1) nanocomposites were investigated.The X-ray diffraction (XRD) technique was used to study the structural properties, The optical properties and magnetic of the samples were studied using an ultraviolet-visible (UV-vis) spectrometer and a vibrating sample magnetometer (VSM) respectively. The electrical properties was measured by voltage-current (I -V) characteristic. In the first stage to prepare ZnO/Fe2O3 nanocomposite, firstly the ZnO nanopowder was synthesized by hydrothermal method. Then in the second stage, the prepared ZnO powder was combined with different weight ratios of iron nitrate and annealed at temperature 500 ℃. The results of the XRD patterns for the samples confirmed the formation of the hexagonal structures for ZnO and Fe2O3. The measured absorption specta of the synthesized samples showed that the ZnO/Fe2O3 nanocomposite increases the absorption in the visible region and its band gap value reduces compared to the zinc oxide. The obtained from VSM results showed that ZnO has a diamagnetic property and α-Fe2O3 shows soft ferromagnetic behavior and for the nanocomposites the magnetization values increased with increasing the Fe2O3 concentration. The results indicated as the annealing temperature increased, the ZnFe2O4 phase forms instead of the Fe2O3 phase, The band gap energy decreases compared to the ZnO and the magnetic parameters values increased.