The iron-silicon-aluminum alloys (particularly Sendust) have been widely used in applications requiring high saturation flux density, low coercive force and high electrical resistivity. For this reason they have been promising for magnetic thin film heads, however, they are too hard and brittle to be made into thin films by rolling, or into three-dimensional products of complex shape by mechanical working or a conventional powder metallurgy process. The reduction in the size and weight of devices that can be accomplished through the use of Sendust has had an important effect on technical development. In this report, magnetic characteristics of Sendust ring samples produced by the powder metallurgy process with spray drying were investigated. After gas-atomized Sendust powders were mixed with paraffin compounds, these powders were granulated by the spray drying method using organic binder consisting of polyvinyl alcohol (PVA) and plasticizer in the range from 0.1 to 0.5 wt% of PVA, in order to improve the powder flowability and mechanical strength of compacted bodies. Results show that the present method is an excellent process for producing near-net-shaped parts with high performance and high dimensional precision after sintering. (C) 2003 Kluwer Academic Publishers.