In this article, an arc discharge nanofluid synthesis system with complex ultrasonic orthogonal vibration and vortex stirring is proposed and developed for a Ag/Fe nanocomposite fluid. For this, one of the electrodes and the ultrasonic vibrator are assembled together to form an orthogonal model with the other electrode and together installed inside the vacuum chamber of the arc discharge system, with de-ionized water as the dielectric liquid. In the fabrication process, the positive electrode uses a Ag rod and the negative electrode uses an Fe rod to apply electrical energy, producing a heating source to generate an adequate arc with a high temperature that can melt and vaporize the two electrodes. The vaporized metal is then rapidly quenched by the designed cooling system, thus nucleating and forming nanocomposite fluid. During arc discharge, through the vibration of the ultrasonic vibrator, disturbance occurs to the insulating liquid. Thus, the vaporized metal can leave the high-temperature gap zone easily and can be rapidly condensed by the low-temperature insulating liquid. The nanocomposite fluid generated by the synthesis system is analyzed by morphology, heat transfer, zeta potential, and magnetism analysis.