The changes that occur in the magnetic properties of iron‐cobalt‐nickel alloys when they are annealed in a magnetic field, have been investigated for a series of these alloys. The maximum change for the iron‐nickel alloys occurs between 65 and 70 percent nickel and is evidenced by a large increase in maximum permeability and a hysteresis loop of rectangular shape. All of the alloys with Curie points above 500°C and with no phase transformation have their properties similarly changed. Thorough preliminary annealing enhances the effect. With an extreme preliminary anneal of 1400°C for 18 hours specimens of 65 permalloy have been obtained with the record value of maximum permeability of 600,000. The magnetic characteristics of materials treated in this way are relatively insensitive to stress. These magnetic characteristics are, however, highly anisotropic; the maximum permeability in one direction is as much as 150 times as large as that at right angles.