The effects of magnetic-field annealing on the soft magnetic properties of nanocrystalline (Fe1−xCox)90Zr7B3 (x=0, 0.1, 0.2, and 0.3) have been investigated. The annealing-induced uniaxial anisotropy (Ku) in these alloys was found to follow an x2 dependence and Ku appears to reflect the population density of Co–Co atomic pairs. The annealing-induced anisotropy is suppressed by applying a rotating field during annealing and the coercivity is reduced by up to 60%. Nanocrystalline (Fe0.8Co0.2)90Zr7B3 annealed under a rotating field of 640kA∕m exhibits a low coercivity of 9.1A∕m and high permeability values (under 0.4A∕m) of 4500 at 1 kHz and 3100 at 100 kHz along with a high saturation magnetization of 1.74 T. These permeability values are comparable to those of Fe-based amorphous alloys while the saturation magnetization is clearly higher than those of amorphous or nanocrystalline soft magnetic alloy ribbons developed to date.