In situ polymerization was used to produce novel AgFeO 2 @PEG/polyurethane network nanocomposites (NP-PUs) with 30-60 wt% of soft poly(dimethylsiloxane) segments in polyurethane (PU), containing 1 wt% of PEG-coated AgFeO 2 nanoparticles, AgFeO 2 @PEG. Physicochemical properties and in vitro biological activity of the NP-PUs were systematically evaluated in terms of AgFeO 2 @PEG (NP) addition and soft segment content. High-angle annular dark-field transmission electron microscopy showed that the nanoparticles were generally uniformly distributed in the PU matrix. Increased soft segment content caused significantly increased intensity of the broad, amorphous X-ray diffraction peaks of crystalline AgFeO 2 , probably because the chemical composition of PU affected the distribution of nanoparticles. The Young modulus, hardness, and plasticity of the NP-PUs were higher than for pure PU and increased with decreasing soft segment content. Decreased soft segment content induced higher microphase separation, increased hydrophilicity and swelling ability, but decreased cross-linking density. Additionally, NP-PUs had higher glass transition temperatures, improved thermal stability, and enhanced nanomechanical performance over pure PU. The NP-PUs demonstrated good selective inhibition of Candida albicans and Candida parapsilosis (30-55%) and no pronounced cytotoxicity to MRC5 human lung fibroblasts.