Carbon coated iron (Fe@C) nanoparticles successfully served as nanofillers for obtaining magnetic epoxy resin polymer nanocomposites (PNCs). The effects of nanofiller loading level on the rheological behaviors, thermal stability, flammability, dynamic mechanical, mechanical properties, electrical conductivity and magnetic properties were systematically studied. And the curing process of the PNCs was also studied by Fourier transform infrared spectroscopy test. A reduced viscosity was observed in the 1.0 wt% Fe@C/epoxy resin liquid suspension samples and the viscosity was increased with further increasing the Fe@C nanoparticle loading. In the TGA test, the introduction of the Fe@C nanofillers gave a lower onset decomposition temperature of the PNCs. However, a reduced flammability was observed in the PNCs due to the easier char formation from epoxy matrix induced by the Fe@C nanoparticles. The dynamic storage and loss modulii were studied together with the glass transition temperature (Tg) being obtained from the peak of tanδ. Enhanced storage modulus was observed in the PNCs with 20.0 wt% Fe@C nanoparticles. The percolation thresholds of the Fe@C nanoparticles were identified with the study of tensile strength and electrical conductivity. Due to the cavities initiated by the nanoparticles, the PNCs with 5.0 wt% Fe@C nanoparticles showed an increased tensile strength up to 60% compared with pure epoxy. The Fe@C nanofillers could efficiently increase the electrical conductivity of the epoxy matrix, and the particle chain observed in the SEM image of fracture surface indicated the formation of percolated Fe@C nanoparticles in the epoxy matrix. Finally, the Fe@C nanoparticles become magnetically harder after dispersing in epoxy due to the decreased interparticle dipolar interaction, which arises from the enlarged nanoparticle spacer distance for the single domain nanoparticles.