Loading of graphite oxide (GO) with tris(2,2'-bipyridyl) iron(II) ions and subsequent calcination affords a novel graphene-based composite with magnetic and electrically conductive properties. The pH of the starting aqueous suspension and the washing procedure play a crucial role in the successful immobilization of the iron precursor, which is mainly governed by ion exchange. The complex is intercalated between the graphene oxide layers, where it adopts a distorted conformation. Rapid heating of this solid results in the deflagration of GO and the formation of ultrafine ( d = 2-14 nm) Fe2O3 particles with maghemite as the dominant phase. The superparamagnetic maghemite crystals are dispersed uniformly in the high-surface-area diamagnetic matrix built up from single or turbostratic stacked graphenes.