Nano size Al/Fe2O3 thermite system has been reported in the literature as metastable intermolecular composites (MIC). Nano Al/nano Fe2O3 MIC has been prepared in various proportions by ultrasonic method. A comparative study on heat output and thermal behavior has been made on MIC using DTA (Differential Thermal Analysis), STA (Simultaneous Thermal Analyzer) and bomb calorimeter. It has been observed that nano-size ingredients produce more heat output compared to micron size ingredients. The ignition temperature also reduces in case of MIC indicating faster release of energy at lower temperature. The impact of ignition of nano-thermite has been reported based on ignition DTA experiment. DTA analysis also shows complete reaction in case of MIC where as micron size thermite showed an endothermic peak of Al melting indicating incomplete reaction. The PXRD (Powder X-Ray Diffraction) data of combustion products has been used to establish the combustion mechanism of MIC. The activation energy of MIC has been calculated using Kissinger, Ozawa and Starink kinetic equations and compared with literature reported values.