A new soft magnetic material exhibiting high magnetizations (B₈₀₀) of 1.60 to 1.70 T under an applied field of 800 kA/m as well as high effective permeabilities (μ_e) of 13000 to 15000 at 1 kHz was produced in Fe–Zr–B alloys ranging from 5 to 7 at% Zr and 2 to 6%B. The material consists of a bcc phase produced by annealing the melt-spun Fe–Zr–B amorphous ribbons for 3.6 ks in the range of 873 to 923 K and the grain size is as small as 15 to 20 nm. The lattice parameter of the bcc phase is about 0.2870 nm which is larger than that of pure α-Fe. The crystallization-induced bcc phase is a metastable phase saturated with the solute elements and the annealing at temperatures above 973 K brings about a decomposition of the bcc phase to α-Fe and Fe₃Zr, leading to a drastic decrease of μ_e. The bcc Fe–Zr–B alloys possess B₈₀₀ and μ_e much higher than those of Fe–Si–B amorphous alloys and hence are highly attractive as a new soft magnetic material.