In this paper, hydroxylated CNTs/Fe2O3 precursors were prepared on the basis of Fenton reagent treatment using aqueous ammonia (NH3H2O), sodium carbonate (Na2CO3) and urea (CO(NH2)2) as precipitants. And then three kinds of hydroxylated CNTs/Fe2O3 compound particles were obtained by calcining the precursors at 523K for 2h. The change of hydroxyl group, phase structure, morphology, thermogravimetric behavior, magnetic property and electrical conductivity of the compound particles were investigated, respectively. The results show that hydroxyl groups exist on surface of CNTs, and Fe2O3 particles in composite particles exhibit high purity and integrated crystalline structure. For NH3H2O precipitant, α-Fe2O3 particles is produced with crystallite size of 62.5nm and no saturation magnetization (Ms). For Na2CO3 precipitant, γ-Fe2O3 is produced with crystallite size of 37.6nm and Ms of 10.5emug-1, and the compound particles are drastically agglomerated. For CO(NH2)2 precipitant, γ-Fe2O3 is produced with crystallite size of 35.1nm and Ms is 9.7 emug-1, and the compound particles are homogeneous with the lowest volume resistivity of 100 Ωcm.