Abstract: Currently, electronic components applied in household electric appliances, cars and mobile phones are increasingly presenting a trend of miniaturization and intelligence. Thus, it is urgent to reduce the core loss of soft magnetic composites (SMCs) apply at high frequency and high power. In this work, gas atomized Fe-9.6wt%Si-5.4wt%Al (FeSiAl) magnetic powder was firstly subjected to a phosphating process for electrical insulation, then the phosphated FeSiAl magnetic powder was heated, formed, and annealed, resulting in FeSiAl SMCs. Analytical results show that the particle surface of the phosphated FeSiAl magnetic powder was transformed from phosphate to silicate after heat treatment, accompanied by an increase in its crystalline size and a decrease in its coercivity. Core loss of the obtained SMCs also decreases apparently, due to the significant decrease in their hysteresis loss. Moreover, when the amount of the phosphoric acid used reaches 0.5 wt%, the core loss decreases from 79.44 mW·cm⁻³ to 58.56 mW·cm⁻³ at 50 kHz.