A comparative study of the thermal decomposition of ammonium perchlorate (AP)/hydroxy terminated polybutadiene (HTPB) based composite propellants has been carried out in presence and absence of nano iron oxide at different heating rates in a dynamic nitrogen atmosphere using differential scanning calorimetry. The pronounced effect was a lowering of the high temperature decomposition by 49 degrees C. A higher heat release up to 40% was observed in presence of nano ferric oxide (3.5 nm). The kinetic parameters were evaluated using the Kissinger method. The increase of the rate constant in the catalyzed propellant confirmed the enhancement of the catalytic activity of ammonium perchlorate. The scanning electron micrographs of nano Fe2O3 incorporated in HTPB revealed a well-separated characteristic necklace-like structure of alpha-Fe2O3 particles at high magnification.