Conducting nanocomposite samples were prepared combining colloidal ferric oxide particles with conducting polypyrrole. Three composite samples (prepared keeping colloidal content fixed and varying the content of the conducting polypyrrole) and the pure polymer were used in the present investigation. Temperature dependent dc and ac conductivity and thermoelectric power for the samples have been measured. The dc conductivity results were analyzed by Mott's variable range hopping mechanism. The variation of ac conductivity with the frequency shows very little change in total conductivity up to a critical frequency, followed by a sudden jump with discontinuity and then increases monotonically following a power law. The frequency exponent decreases with temperature as predicted by the correlated barrier hopping theory. Above 50 K the ac component of the conductivity increases almost linearly as predicted by the quantum mechanical tunneling model. It is found that all the features of ac conductivity cannot be reconciled into an existing single theory. The thermoelectric power is positive, low, and varies linearly with temperature, indicating a metallic character and the presence of polarons and/or bipolarons as the cationic charge carriers in the composites. The overall nature of the S(T) curves suggests that in addition to a contribution from hopping a linear metallike component is also active for the thermopower. © 2000 American Institute of Physics.