Multiwall carbon nanotubes (MWCNTs) possessing an average inner diameter of 150 nm were synthesized by template assisted chemical vapor deposition over an alumina template. Aqueous ferrofluid based on superparamagnetic iron oxide nanoparticles (SPIONs) was prepared by a controlled co-precipitation technique, and this ferrofluid was used to fill the MWCNTs by nanocapillarity. The filling of nanotubes with iron oxide nanoparticles was confirmed by electron microscopy. Selected area electron diffraction indicated the presence of iron oxide and graphitic carbon from MWCNTs. The magnetic phase transition during cooling of the MWCNT-SPION composite was investigated by low temperature magnetization studies and zero field cooled (ZFC) and field cooled experiments. The ZFC curve exhibited a blocking at approximately 110 K. A peculiar ferromagnetic ordering exhibited by the MWCNT-SPION composite above room temperature is because of the ferromagnetic interaction emanating from the clustering of superparamagnetic particles in the constrained volume of an MWCNT. This kind of MWCNT-SPION composite can be envisaged as a good agent for various biomedical applications.