The nanostructural formation kinetics in a soft magnetic Fe80Nb6B14alloy have been investigated by means of differential scanning calorimetry, thermogravimetric analysis and transmission electron microscopy. Unlike nanocrystalline Fe–Zr–B soft magnetic alloys, where the nanocrystallite formation is governed mostly by a nucleation and growth mechanism, the nanostructural formation mechanism in the Fe–Nb–B alloy shows a change in the fraction transformed range 0.1–0.2. The first‐ and second‐stage nanostructural formation processes have been described by the nucleation and growth and grain‐growth models, respectively. This two‐stage nature in the nanostructural formation kinetics can be attributed to a high population density of the primary bcc nuclei. ©1995 American Institute of Physics.