In this study, biocompatible magnetic Fe3O4/polyurethane elastomer nanocomposites were synthesized using in situ polymerization method. Pure Fe3O4 nanoparticles were synthesized by coprecipitation method and characterized by X-ray diffraction, Fourier transform infrared (FTIR), vibrating sample magnetometer and transmission electron microscopy. The chemical structure, thermal properties, and mechanical properties of the Fe3O4/PU nanocomposites, as well as the evaluation of effect of nanoparticles content on thermal and mechanical properties, were studied by FTIR, thermogravimetric analyzer (TGA), dynamic mechanical thermal analysis (DMTA), and tensile analysis. The dispersion and morphology of the nanoparticles in the nanocomposites were studied by scanning electron microscopy (SEM) technique. SEM results confirmed that nanoparticles tend to be more agglomerated in polyurethane matrices with increasing of nanoparticles content. TGA analysis also showed a decrease in the thermal stability of Fe3O4/polyurethane nanocomposites compared to pure polyurethane, which was attributed to disruption of hydrogen bonds between polyurethane chains by Fe3O4 nanoparticles. DMTA results also showed an increase in glass transition temperature of Fe3O4/PU nanocomposites compared to pure polyurethane. Biocompatibility studies demonstrated that fabricated nanocomposites can be good candidates for biomedical application.