The present invention relates to a composite powder, preparation and use thereof. The composite powder according to the present invention is prepared by intimately mixing an irradiated or non-irradiated rubber latex with a slurry of inorganic particles in a ratio corresponding to that of rubber particles to inorganic particles in the composite powder according to the present invention, and then drying the resultant mixture. The composite powder according to the present invention comprises agglomerates composed of powdery rubber particles and inorganic particles, with inorganic particles being uniformly distributed either inside the agglomerats or both inside the agglomerates and on the surfaces thereof. The composite powder according to the present invention can be easily dispersed in plastic matrixes and thus can be compounded with plastics to produce toughened plastics and thermoplastic elastomers.