Ultrasonically initiated miniemulsion polymerization of styrene in the presence of Fe3O4 nanoparticles was successfully employed to prepare polystyrene (PS)/Fe3O4 magnetic emulsion and nanocomposite. The effects of Fe3O4 nanoparticles on miniemulsion polymerization process, the structure, morphology and properties of PS/Fe3O4 nanocomposite were investigated. The increase in the amount of Fe3O4 nanoparticles drastically increases the polymerization rate due to that Fe3O4 nanoparticles increase the number of radicals and the cavitation bubbles. Polymerization kinetics of ultrasonically initiated miniemulsion polymerization is similar to that of conventional miniemulsion polymerization. PS/Fe3O4 magnetic emulsion consists of two types of particles: latex particles with Fe3O4 nanoparticles and latex particles with no encapsulated Fe3O4 nanoparticles. Fe3O4 nanoparticles lower the molecular weight of PS and broaden the molecular weight and particle size distribution. Thermal stability of PS/Fe3O4 nanocomposite increases with the increase in Fe3O4 content. PS/Fe3O4 emulsion and nanocomposite exhibit magnetic properties. PS/Fe3O4 magnetic particles can be separated from the magnetic emulsion by an external magnetic field and redispersed into the emulsion with agitation.