Nanocomposite samples were made using the polymerization fabrication method to prepare films consisting of iron (III) oxide (Fe2O3) and poly(4-chloroaniline) (P(4ClAni)). The samples were characterized using energy-dispersive X-ray spectroscopy (EDX), X-ray diffraction, photoluminescence and transmission electron microscopy (TEM) to confirm that P(4ClAni)/iron (III) oxide nanocomposite films had been successfully fabricated. The EDX analysis confirmed the predicted chemical composition of P(4ClAni)/iron (III) oxide. The TEM showed spherical nanoparticles of iron (III) oxide with almost homogeneous and uniform sizes between 30 and 40 nm. The effect of iron (III) oxide on optical properties in the wavelength range 190–1200 nm was recorded. The dispersion energy values for P(4ClAni) were found to increase from 0.72 to 0.81, 0.96 and 1.21 eV when the concentration of iron (III) oxide was increased to 3, 6 and 9%, respectively. The relaxation time decreased from 4.46 × 10−6 to 3.52 × 10−6 s as the concentration of iron (III) oxide increased from 3 to 9%. Strong interactions between P(4ClAni) and iron (III) oxide were supported by the obtained results of this work. The obtained data indicate that the prepared P(4ClAni)/iron (III) oxide nanocomposites can be applied in several areas of optoelectronics.