Alumina has been prepared by sol-gel method as the coating layer in the fabrication of FeSiAl soft magnetic composites (SMCs). Influence of the Al2O3 content on the magnetic properties of the SMCs has been studied, and optimized effective permeability (mu (e) = 116.3) and core loss (P (cv) = 331.2 mW cm(-3)) measured at 50 kHz, 100 mT was achieved with 0.8 wt% Al2O3. Hybrid phosphate-alumina coating has also been used to prepare the FeSiAl SMCs with a total addition of 0.8 wt%. Significantly improved performance of the SMCs can be achieved with the hybrid coating compared to single phosphate or alumina coating. The addition of 0.2 wt% H3PO4 and 0.6 wt% Al2O3 gives rise to the optimal magnetic properties (mu (e) = 123.4; P (cv) = 226.4 mW cm(-3)) of the FeSiAl SMCs. For the hybrid coating, the inner phosphate layer grown by direction reaction at the powder surfaces gives rise to excellent adhesion. Also, investigation on the thermal stability of the coatings indicates that the outer Al2O3 layer hinders the decomposition of the phosphate layer, leading to enhanced magnetic performance of the SMCs.