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In this study, novel ferromagnetic Ni‐containing silicon oxycarbide (SiOC–Ni) was successfully fabricated from a base polysiloxane (PSO) with the addition of nickel 2,4‐pentanedionate. The resultant SiOC–Ni nanocomposite consists of in situ formed Ni nanocrystallites with a small amount of NiO uniformly dispersed in the amorphous SiOC matrix, and the corresponding nanocrystallite size increases with the increase of the pyrolysis temperature. The formation of nickel silicides (Ni_xSi_y) is completely suppressed by the effect of water vapor during the pyrolysis. The fundamental phase evolution process and mechanisms are explained. In an argon atmosphere, the SiOC–Ni materials pyrolyzed at 900°C are stable up to 1000°C with less than 6 wt% weight loss; they exhibit desirable electrical conductivity up to ~900°C with the highest electrical conductivity at ~247 S/m. This series of SiOC–Ni materials also demonstrates exciting ferromagnetic behaviors. Their new semiconducting behavior with soft ferromagnetism presents promising application potentials for magnetic sensors, transformers, actuators, etc.