High performance PM iron-base alloy was fabricated with annealed powder by high velocity compaction. The effects of powder annealing on densification behavior, variations of stress waves and the resulting mechanical properties of iron-base alloy were studied. The results show that micro-hardness of the powder decreases from 97 Hv to 81 Hv after annealing at 800 degrees C, facilitating the improvement of powder plasticity and compressibility. Compared with the compacts prepared from unannealed alloy powder, green density of the compacts made from annealed alloy powder is 0.11-0.25 g/cm3 higher at the impact velocity range of 6.2-9.4 m/s. Green density of the compact made from annealed alloy powder is as high as 7.61 g/cm3 at 9.4 m/s. The tensile strength, yield strength and hardness of the heat treated specimen reach 1459 MPa, 1185 MPa and 50.2 HRC, respectively. (c) 2015 Elsevier B.V. All rights reserved.