A nanocomposite material has been characterized that contains nanometer size magnets that are free to rotate in response to an applied magnetic field. The composite consists of 5–10 nm crystals of γ-Fe2O3 dispersed in a solid methanol polymer matrix. The material was prepared by freezing a methanol-based ferrofluid of γ-Fe2O3 and subjecting it to a magnetic field applied in alternate directions to anneal the matrix. Before the field treatment, the solid displays magnetic behavior characteristic of an ordinary nanoscopic magnetic material. It is superparamagnetic above the blocking temperature (160 K) and hysteretic below, showing magnetic remanence and coercivity. After the field treatment to anneal the matrix, the same solid shows only Curie–Weiss behavior above and below the blocking temperature over the temperature range from 4.2 to 200 K and in response to applied magnetic fields as low as 1.59 kA/m. The data are consistent with a solid containing rotationally free, nanoscopic magnets encased in cavities of very small dimensions. The free rotation of the particles precludes the observation of magnetic relaxation phenomena that are characteristic of magnetic solids and ferrofluids. The present solid portends a class of magnetic materials with very little or no electrical and magnetic loss.