Magnetic nanoparticles are central to the development of efficient hyperthermia treatments, magnetic drug carriers, and multimodal contrast agents. While the magnetic properties of small crystalline iron oxide nanoparticles are well understood, the superparamagnetic size limit constitutes a significant barrier for further size reduction. Iron (oxy)hydroxide phases, albeit very common in the natural world, are far less studied, generally due to their poor crystallinity. Templating ultrasmall nanoparticles on substrates such as graphene is a promising method to prevent aggregation, typically an issue for both material characterization and applications. We generate ultrasmall nanoparticles, directly on the carbon framework by the reaction of a graphenide potassium solution, charged graphene flakes, with iron(II) salts. After mild water oxidation, the obtained composite material consists of ultrasmall potassium ferrite nanoparticles bound to the graphene nanoflakes. Magnetic properties as evidenced by magnetometry and X-ray magnetic circular dichroism, with open magnetic hysteresis loops near room temperature, are widely different from classical ultrasmall superparamagnetic iron oxide nanoparticles. The large value obtained for the effective magnetic anisotropy energy density Keff accounts for the presence of magnetic ordering at rather high temperatures. The synthesis of ultrasmall potassium ferrite nanoparticles under such mild conditions is remarkable given the harsh conditions used for the classical syntheses of bulk potassium ferrites. Moreover, the potassium incorporation in the crystal lattice occurs in the presence of potassium cations under mild conditions. A transfer of this method to related reactions would be of great interest, which underlines the synthetic value of this study. These findings also give another view on the previously reported electrocatalytic properties of these nanocomposite materials, especially for the sought-after oxygen reduction/evolution reaction. Finally, their longitudinal and transverse proton NMR relaxivities when dispersed in water were assessed at 37 °C under a magnetic field of 1.41 T, allowing potential applications in biological imaging.