This study investigates the effects of cellulose nanocrystals (CNCs) on the dispersion and colloidal stability of Fe3O4-cellulose nanocrystal nanocomposites (MCNCs). The hybrid composites were prepared using an ultrasound assisted in situ co-precipitation technique in the presence of cellulose nanocrystals (CNCs) as the dispersant. The microscopy analysis showed that the dispersion of MNPs improved greatly with CNC as dispersant. STEM images showed that the mean particle size of Fe3O4 nanoparticle (MNPs) on all CNC samples was found to be less than 20 nm. However, the MNPs aggregated in the sample with 0.01 wt% of CNC. The colloidal stability improved substantially in the presence of 0.05 wt% CNC, and increasing the CNC concentration any more made no difference to the dispersive properties. The surface charges of MCNCs decreased drastically from -14.6 to -59.7 mV as CNC concentration increase from 0.00 to 1.00 wt%. The amount of MNPs deposited on CNC template decreased considerably as CNC concentration increased. Higher amount of MNPs deposited on the CNC surface gave rise to a higher surface wettability and magnetivity. All MCNC samples exhibited superparamagnetic properties and the saturation magnetization (Ms) of MCNC composites was reduced from 30.798 to 1.625 emu g-1 with increasing CNC content from 0.01 to 1.00 wt%. Overall, the results of the study showed that the incorporation CNC led to an improvement of the MNP dispersion and colloidal stability. The as-prepared MCNCs can be used to stabilize palm olein-based emulsions, suggesting their potential usefulness as nanocarriers in food and drug delivery applications.