Abstract: Soft magnetic composites with phenolic resin as the binder and MgO coated reduced iron powder was prepared by mechanical stirring method. The influence of the content of the coating agent and the heat treatment temperature on the coating effect and magnetic properties of the magnetic powder core was studied. Research result shows that 2wt% MgO insulating material is uniformly coated on the surface of iron powders. Excessively high temperature can cause insulation envelope complex failure, cause a sharp increase in magnetic loss. With the increase of the coating agent content, the magnetic properties are improved. The MgO content reaches 2wt%, the magnetic permeability stabilizes at 90 as the frequency increases, and the magnetic loss is 62.34 kW/m³（50 mT, 50 kHz）. The loss separation further shows that the soft magnetic composites coated with 2wt%MgO has a relatively low eddy current loss factor under the heat treatment temperature is 170 ℃.