In this paper, the soft magnetic composites of nanocrystalline flaky powder mixed with carbonyl iron powder (CIP) were prepared. With the increase of ultrafine CIP content, the molding orientation of flaky power was improved, and the insulating layer was protected. The saturation magnetization (M-s) of the composites increased regularly, while the coercivity changed little. The DSC curve of Fe73.5Si13.5B9Nb3Cu1 amorphous powder indicates that the forming temperature of nanocrystalline was between 540 degrees C and 640 degrees C. The pure nanocrystalline alpha-Fe(Si) was formed when annealing temperature was 555 degrees C. Ring-shaped magnetic cores were prepared by molding for testing soft magnetic properties. The values of permeability and power loss were significantly optimized when CIP and nanocrystalline powder were mixed. In order to further improve the magnetic properties, the magnetic cores were annealed at different temperatures according to the results of DSC and XRD. After annealing, the magnetic properties were greatly improved, the evolutions of permeability and power loss were characterized, and the reasons for these changes were analyzed.