Magneto-optic properties of magnetic materials have much influence on the performance of these current sensors. For practical using, it is generally demanded that the sensing materials had the good magneto-optic properties of large Faraday rotation. Among the most attractive properties of the transparent materials containing Fe2O3 are those related to the magneto-optical effects. The Sol-gel processes are extensively used for the preparation of optical or magneto-optical nano-composite materials though the incorporation of metal ions in the silica matrix. In this study, the Nd2O3 doped Fe2O3-SiO2 nano-composite films with different concentrations of Nd2O3, heated temperature and the number of layers were prepared by sol-gel method. The dependence of Faraday rotation angle of films is studied at room temperature. We find that appropriate concentrations of Nd2O3 (Nd/Si=0.011) doped has improved magneto-optic properties of higher Faraday rotation angle, the θF value increases with the decrease of the temperature below 500°C, the absolute value of Faraday rotation angle increases as the number of layers increases.© (2010) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.