This study focused on the preparation of magnetic chitosan nanocomposite that has a potential application to bone repair and regeneration using an in situ composite method where chitosan membrane was used as the template and NaOH was used as the precipitant. X-ray diffraction analysis results show the formation of magnetite in the chitosan matrix. From the magnetic measurement, it could be concluded that the magnetic chitosan rods were superparamagnetic,and that this is the unique property of nanomagnetite. Macroscopical layer structure of the magnetic chitosan rods was observed from the photographs after mechanical test, and the microlayer structure of the rods was observed from the images of scanning electron microscopy. The mechanism for preparing the rods was discussed in detail. Transmission electron microscope was used to investigate the magnetite particles in the chitosan matrix and from the images it was concluded that the magnetite particles dispersed well in chitosan matrix with particle size of about 10 nm. The mechanical properties of the magnetic chitosan rods were measured and the blending strength was found to be 98.8 MPa. The mechanical properties did not decline when compared with those of the pure chitosan materials.