MgFe2O4 nanostructures were synthesized via a facile hydrothermal reaction. The effect of various surfactants such as cationic, anionic and polymeric on the morphology of the product was investigated. Magnetic nanoparticles were added to cellulose acetate (CA) to make magnetic nanocomposite. Nanoparticles appropriately enhanced flame retardant property of the CA matrix. Application of the most conventional flame retardants is limited with respect to the environmental requirements. The most important novelty of this work is the preparation of a nontoxic magnetic and flame retardant cellulose acetate nanocomposite. Dispersed nanoparticles play the role of a magnetic barrier layer, which slows down product volatilization and prevents flame and oxygen from reaching the sample during decomposition of the polymer. In the presence of flame, magnetic nanoparticles remain together (show resistance to drop falling) and build a barrier. Also, distribution of the magnetic nanoparticles into cellulose acetate matrix increases the coercivity.