Elastomer nanocomposites were prepared by mixing carbon nanofiber (CNF) decorated with metal nanoparticles (CNF–Fe₂O₃) with latex. The Fe₂O₃ metal nanoparticles were decorated on the CNF by electrostatic attraction via a green and facile solution-based method. The presence of the metal nanoparticles on the surface of the CNF improved their dispersion and electric contact resistance in the elastomer matrix. Interestingly, the CNF–Fe₂O₃/elastomer composite exhibited improvements in both tensile strength and elongation (carbon black/elastomer), by as much as 9.7 and 28.9%, respectively, compared to an elastomer control without filler. Also, the CNF–Fe₂O₃/elastomer exhibited superior thermal and electrical conductivity compared with the control. In an applied magnetic field the elastomer nanocomposites showed a significant transition from dominant diamagnetism to ferromagnetism due to synergies between the Fe₂O₃ nanoparticles and the CNF. The elastomer nanocomposites prepared with CNF–Fe₂O₃ will open significant new opportunities for preparing advanced elastomer nanocomposites for future engineering applications.