SiO2 coated γ-Fe2O3 nanocomposite powder has been successfully synthesized by chemical vapor condensation process and its feasibility on hyperthermic application was investigated in this study. The power loss of SiO2 coated γ-Fe2O3 nanocomposite powder which means the magnetic heating effect under alternative magnetic field was much higher than the single phase γ-Fe2O3 nano powder due to the very fine size under 20 nm and well dispersion in biologically compatible SiO2 matrix. The superparamagnetism and hyperthermic property of SiO2 coated γ-Fe2O3 nanocomposite powder were discussed in terms of microstructural development in this study.