Abstract In this paper, the transformation in easy-axis anisotropy and magnetostriction in Co-rich amorphous microwires by dc current annealing has been studied with the aim to realize stress-sensitive magnetization process and magnetoimpedance (MI). With increasing the annealing current intensity I a n , the anisotropy and magnetostriction undergo non-monotonic changes owing to different processes occurring during annealing: structural relaxation, atomic pair ordering, atomic rearrangements, internal stress relief and phase transformation at the crystallization onset. At moderate values of I a n the induced anisotropy sets a near-circumferential easy direction whilst the magnetostriction parameter increases from a very low negative value in the as-cast state to positive values. At optimal combination of the induced anisotropy and positive magnetostriction a highly stress-sensitive MI behavior is observed which is important for stress-sensory applications. At these conditions, the impedance vs. magnetic field plots may change shape in the presence of tensile stress which at zero field is accompanied by a huge impedance change in the range of 70–162% per 100 MPa.