PURPOSE: To produce an Fe-base alloy which has the soft magnetic characteristics suitable compacted magnetic cores and magnetic shielding materials and has an excellent hyperfine crystal compsn. by subjecting the melt of the Fe-base alloy having a specific compsn. to super-rapid cooling.

CONSTITUTION: The melt of the Fe-base alloy having the compsn. expressed by formula I is subjected to the super-quick cooling by an atomization method or cavitation method, etc., and thin amorphous strips, flakes, alloy wires, etc., are produced. This amorphous Fe-base alloy material is heated by charging hydrogen for the time enough to induce embrittlement in a temp. range from the temp. lower by about 250°C than the crystallization temp. of said alloy up to the crystallization temp. to embrittle the material; thereafter, the material is pulverized. The powder is further reheated to the temp. higher than the crystallization temp. to recrystallize at least 50% of the amorphous structure to crystal grains of ≤500 average grain size. The Fe-base alloy powder which has the hyperfine crystal structure having the excellent soft magnetic characteristics and is suitable for the compacted magnetic cores and magnetic shielding materials is thus produced.