Investigation on magnetocaloric effects, magnetic entropy, Curie temperature, and specific heat of nanocomposite binary gadolinium alloys Gd–Tb, Gd–Zn, and Gd–Y has been carried out with an applied magnetic field of 1 T and in a temperature range of 233–313 K. Compared with the respective bulk alloys, the as‐prepared nanocomposite alloys were found to have higher specific heat and lower Curie temperature. The nanocomposite Gd–Y alloy exhibited distinctive enhancement of both magnetocaloric effect and magnetic entropy over that of the bulk alloy. The finding is of importance for developing new materials for magnetic refrigeration at room temperature. A discussion concerning the enhanced magnetic entropy in nanometer superparamagnetic systems is presented in detail. ©1996 American Institute of Physics.