The interparticle interactions in a magnetic nanocomposite play a dominant role in controlling the phase transitions -superparamagnetic to superspinglass to superferromagnetic. These interactions can be tuned by controlling the size and number density of nanoparticles. Aerogel composites, 0.3 Ni-BC and 0.7 Ni-BC, consisting of Ni nanoparticles distributed in bacterial cellulose have been used as model systems to study the effect of interparticle interactions with increasing fraction of Ni in the composite. Contrary to conventional approach, the size of Ni nanoparticles is not controlled and was allowed to form naturally in the bacterial cellulose template. The structural characterization using x-ray diffraction and electron microscopies indicates the presence of only Ni and cellulose with no other phases. Thermogravimetric analysis shows that the Ni content in the two aerogels is 78 % and 83.8 % respectively. The uncontrolled growth of Ni in cellulose matrix results in the formation of nanoparticles with 3 different size distributions -< 10 nm particles mainly distributed along the length of fibrils, 50 nm particles present in the intermediate spaces between the fibrils and > 100 nm particles present in voids formed by the reticulate structure. The magnetic behavior of these composites as a function of temperature, magnetic field and frequency shows that different magnetic states can be accessed at different temperatures. At room temperature the composites exhibit a weakly ferromagnetic behavior with a coercivity of 40 Oe which increases to 160 Oe at 10 K. The magnetization at both the temperatures however is found to be non-saturating even at fields as high as 20 kOe. The transition from weakly ferromagnetic state at room temperature to a superferromagnetic state at low temperatures is mediated via a superspinglass state at intermediate temperatures.Both the superspinglass state and the superferromagnetic state are found to be sustained by the interparticle interactions aided by the presence of small nanoparticles along the length of cellulose fibres. A temperature dependent microstructural model has been developed combining the structural and magnetic results obtained from the two composite aerogels. *satish.vitta@iitb.ac.in