The composite based on the microns iron size powder and MgO nanopowder was prepared using pressing followed by conventional and microwave sintering. Microstructure of the composite was investigated to evaluate the changes induced by different sintering technology. Young’s modulus, flexural strength and hardness of composites were analyzed to investigate the mechanical properties in dependence on MgO content, as well as in dependence on the sintering method. Microstructure and mechanical properties as well as functional magnetic properties of prepared composites are discussed in the paper. The main benefit of microwave heating found within process time shortening was confirmed in the case of the microwave sintered Fe/MgO composite.