Soft magnetic powders are the main component of soft magnetic composites that are covered by an insulation layer. In this work, iron powder with high purity is covered by an inorganic material (iron phosphate) and then by a polyepoxy (DDS + DGEBA). The effect of amount of resin, different curing treatments and compaction pressure on the magnetic properties, residual stress, densification and microstructure are investigated. Results show that the sample with 3 wt% polyepoxy has an acceptable real part of permeability and minimum imaginary part of permeability in comparison with other samples. Also, different curing treatments have different effects on the physical and magnetic properties of the samples. For example, partial curing treatment can be applied for reducing the imaginary part of permeability; and annealing treatment can reduce this part of permeability and increase the real part of permeability. (C) 2008 Elsevier B.V. All rights reserved.