This study was designed to investigate the effect of modified iron oxide nanoparticles (MINP) and cellulose nanocrystals (NCC) on magnetic, thermal and dynamic-mechanical properties of poly(vinyl alcohol) based nanocomposites. Fe3O4 nanoparticles have been synthesized using a chemical co-precipitation route. Nanocomposite films were developed by solvent casting method and their properties were characterized by vibrating sample magnetometer (VSM), differential scanning calorimetry (DSC) and dynamic mechanical analysis (DMA). DSC results found that with incorporation of nanoparticles, the glass transition temperature increase slightly to higher temperatures; however, the degree of crystallinity and the values of the melting temperature are found to decrease. Dynamic mechanical analysis revealed that, at the elevated temperatures, improvement of mechanical properties due to the presence of nanoparticles was even more noticeable. Addition of nanoparticles resulted in increased thermal stability of PVA due to the reduction in mobility of matrix molecules by strong hydrogen bonds between nanocomposite components. Results indicated that, MINP and NCC have synergistic effect on improving of poly(vinyl alcohol) properties. The VSM findings showed that the saturation magnetization of iron oxide nanoparticles reduced after modification. This can be attributed to formation of hydroxyapatite on nanoparticles surface. The saturation magnetization (Ms) of PVA- MINP films was higher than PVA-MINP- NCC film. This result probably is related to more amount of magnetic nanoparticles in PVA-MINP films.