Nickel oxide (NiO) nanoparticles were prepared by the simple approach of co-precipitation method using nickel carbonate as precursor. Novel electrically conducting composite materials consisting of nickel oxide nanoparticles dispersed in a polyaniline (PANI) are prepared by an in-situ polymerization method in the presence of different weight percentage of NiO (5, 10, 15 and 20%) at room temperature using ammonium persulphate (NH4)2S2O8 as an oxidant in acidic medium. The synthesized PANI/NiO nanocomposites have been characterized by means of XRD, FTIR, UV-VIS, TEM and VSM for structural and magnetic investigation. NiO has single phase cubic structure with average crystallite size of 23nm and is intercalated to form a core shell of PANI due to which nanocomposites show the peaks of NiO as well as PANI. PANI/NiO nanocomposites showed semiconducting as well as ferromagnetic nature. It was also observed that the conductivity of the PANI/NiO nanocomposites decreased and the magnetization increased with the increase in weight percentage of NiO in PANI. We studied first time the effect of NiO on transport properties of PANI/NiO nanocomposites in terms of transport parameters such as electrical conductivity (s), charge localization length (a-1), most probable hopping distance (R) and charge hopping energy (w) using variable range hoping (VRH) of charge model as described by Ziller to conducting polymers.Copyright © 2013 VBRI press.