As power densities and switching frequencies dramatically increase, a potential area of advancement for encapsulant technologies is to utilize them to mitigate electromagnetic interference, which directly impacts device efficiency at high switching frequencies; one promising topic involves the creation of magnetic nanoparticle-enhanced encapsulants, with intrinsic sensitivity to electromagnetic fields that could provide additional noise shielding for power electronic devices. A nanocomposite encapsulant was created by directly incorporating magnetic iron oxide nanoparticles into a silicone matrix. The nanoparticles, with an average size of 100 nm, achieved excellent dispersion in the silicone polymer, even at high concentrations, with no additive or surfactants needed to improve stability. Material testing, including thermo mechanical analysis and thermal conductivity measurements were performed to determine if the addition of the nanoparticles altered the thermal or mechanical properties of the base silicone. The nanocomposites at different concentrations observed thermal conductivities of 0.5 W/m-K and coefficient of thermal expansions of 280 ppm/°C, which resembles that of normal silicone; however, the addition of the iron oxide reduced the dielectric breakdown strength of the silicone matrix exponentially with respect to concentration from 20 kV/mm to 3 kV/mm. Further efforts to optimize the dielectric properties of the nanocomposites with respect to the nanoparticle loading is necessary in order to directly apply this technology; however, the results indicate magnetic nanocomposites could be a potential avenue towards mitigating electromagnetic interference in power devices.