Silver/polyaniline (Ag/PANI) composites were prepared by an in-situ synthesis method. Interestingly, the permittivity changed from positive to negative along with the formation of percolation network. The plasma oscillations of free electrons from the network made a dominant effect on the negative permittivity behavior. Further investigation based on equivalent circuit analysis revealed that the composites with negative permittivity presented inductive character. The epsilon-negative composites can be applied to electromagnetic shielding, absorbing and attenuation.