In this report, the functional properties of polyvinyl alcohol/(CoFe2O4/CoFe2) composite films fabricated through solution casting method were reported. Highly-magnetic CoFe2O4/CoFe2 composite was obtained through thermal reduction process and the effect of CoFe2O4/CoFe2 loading on the magnetic, optical, thermal and mechanical properties of PVA composite films was evaluated. At room temperature, the optical transparency was decreased from 68 to 38% but the magnetization was enhanced to 42.37 emu/g by an increase of CoFe2O4/CoFe2 to 15 wt%. Also, the visible-light emission intensity near 400–521 nm was influenced. We demonstrated that the wt% of CoFe2O4/CoFe2 and -OH intramolecular interactions between the polymer-chains played an important role in controlling the functional properties of composites. The performance analysis and comparison of the results revealed that PVA-composite film fabricated with 5 wt% of CoFe2O4/CoFe2 displayed significant magnetization, luminescence intensity, and high tensile-strength compared to others and was found to be a promising candidate for smart devices.