A single step gas phase method was developed to synthesize silica-coated iron oxide nanocomposite materials in a furnace aerosol reactor (FuAR) using premixed precursors. Synthesis of single component silica and magnetic iron oxide was studied to understand the decomposition mechanism of the precursors, identify the product crystal phase, and optimize the viable operating conditions for the controlled synthesis of nanocomposite material with desirable crystal phase, size, and morphology. The single component decomposition results are further extended to synthesize silica-coated magnetic iron oxide nanocomposite material using premixed precursor. A mechanism was proposed to explain the formation of SiO2-coated γ-Fe2O3 nanocomposite in a single step in a FuAR based on chemical kinetics and was verified by supporting characterization results. The synthesized magnetic γ-Fe2O3/SiO2 nanocomposite material was further tested for suspension stability, magnetic properties, and surface reactivity and was compared with uncoated γ-Fe2O3 nanoparticles to demonstrate improved surface properties.