Biocomposites containing magnetic nanoparticles have the potential to combine the unique, tunable properties of nanoparticles with the strong mechanical and environmentally sustainable properties of natural fibers like cotton. Recently, a method to synthesize Fe–Pd nanoparticles on cellulose has been developed. This study presents a detailed investigation on how the structural and magnetic properties of these nanoparticle biocomposite materials are affected by increasing metal loading with respect to the cellulose while maintaining a fixed 1:1 Fe:Pd atomic ratio. Infrared spectroscopy and electron microscopy (SEM and TEM) indicate that spherical Fe–Pd nanoparticles (approximately 3–8 nm in diameter) are distributed heterogeneously throughout the fiber matrix along with amorphous iron oxide, while XRD suggests the dominant crystalline phase within the nanoparticles is likely FePd3 under significant strain. The magnetic response of the biocomposites in static and dynamic magnetic fields (as a function of frequency and temperature) reveals a polydisperse ensemble of Fe–Pd nanoparticles with up to four distributions of blocking temperatures. The lower temperature distributions are prevalent at low metal loading. As the metal loading increases, the higher temperature distributions emerge, while the lower temperature distributions are suppressed. This result points towards enhanced nanoparticle heterogeneity and agglomeration as the metal loading increases.