Ceramic fibers are high-tech structural key components of ceramic matrix composites (CMCs), which are a very promising class of materials for applications in next-generation turbines, especially nonoxide ceramic fibers, usually produced by the polymer-derived ceramics (PDC) route, which possess the enhanced mechanical and thermostructural properties necessary to withstand the harsh conditions (temperature and atmosphere) imposed on CMCs. However, recycling composite materials, such as fiber-reinforced polymers and CMCs, is still a big challenge. Here, we present for the first time the processing of superparamagnetic iron-containing ceramic fibers, which, due to their magnetic properties, can be separated from the matrix material of a composite. The synthesis strategy of the novel functional ceramic fibers is based on a tailored reaction of polyorganosilazane with an iron complex, resulting in a suitable, meltable polymer. After melt-spinning and curing, subsequent pyrolysis leads to superparamagnetic ceramic fibers with a saturation magnetization of 1.54 emu g-1 because of in situ-formed iron silicide nanoparticles of an average size of 7.5 nm, homogeneously dispersed in an amorphous SiCNO matrix. Moreover, the ceramic fibers exhibit a tensile strength of 1.24 GPa and appropriate oxidation resistance. The developed versatile reaction strategy allows also for the incorporation of other elements to implement further functionalities for processing of multifunctional composites.