Abstract: A magnetic composite material of polyaniline and Fe₂O₃ (PANI@Fe₂O₃) was prepared by the “one-step chemical method”, and characterized by IR and XRD. Its adsorbility as an adsorbent in treatment of dyestuff-polluted waters was studied by using methyl orange (MO) as a model compound of dyestuff, under various conditions of acidity, time and temperature of adsorption and also the change of concentration of salts. It was found that adsorption of MO on PANI@Fe₂O₃ was attained to equilibrium after 30 min. As shown by the data, the adsorption was found to conform with the pseudo-2nd order kinetic model. Within the range of temperatures tested (293 K to 313 K), the adsorption capacity of PANI@Fe₂O₃ was raised with raising of temperature. A weakly acidic condition (e.g., pH 5) of the dyestuff polluted waste water was found to be favourable for the adsorption of dyestuffs. The capacity of adsorption was lowered significantly in the presence of salt (taking NaCl as specimen). As shown by the data of thermodynamic study, the adsorption of PANI@Fe₂O₃ was concluded to conform with the Freundlich isothermal adsorption model, and it was found to be a spontaneous endothermic process of multi-layer adsorption. In addition, due to its magnetic property, the PANI@Fe₂O₃ together with the adsorbates on it could easily be separated from the matrix water by the action of outer magnetic field.