Urchin-like CdS-Fe3O4 nanostructures were synthesized via a surfactant-free hydrothermal reaction at relatively low temperatures. The effect of various parameters such as temperature, time and molar ratio on the size and morphology of the product was investigated. Nanostructures were added to cellulose acetate (CA) in order to make magnetic nanocomposite and the as-prepared products were characterized using scanning electron microscopy (SEM), transmission electron microscopy (TEM), X-ray diffraction (XRD), Fourier transform infrared spectroscopy (FT-IR) and atomic force microscopy (AFM). It was shown that nanostructures appropriately enhanced flame retardant property of the CA matrix. Dispersed nanostructures act the role of barriers which slow down heat transfer and consequently product volatilization during decomposition procedure. Alternating gradient force magnetometer (AGFM) shows that CdS-Fe3O4 nanostructures exhibit ferrimagnetic behaviour at room temperature and distribution of the CdS-Fe3O4 into cellulose acetate matrix increases the coercivity.