Abstract Fe/Fe3O4 core-shell structure soft magnetic composites were synthesized by in-situ oxidation method, the shell thickness control method and its effect on magnetic properties was investigated. The formation of Fe3O4 shell will decrease eddy-current loss for its high resistivity but reduce the permeability and saturation magnetization for its ferrimagnetic characteristics, appropriate shell thickness is the key factor to obtain a good performance of composites. The magnetic loss decreased dramatically due to the existence of a dense insulation layer and increased slightly owing to the presence of cracks in the insulation layer with the shell thickness increase further. The optimum magnetic properties of the composites were obtained for the composites with about 0.17 μm shell thickness, which exhibits a high permeability (μ) of 55, a high magnetization of 232.1 emu/g at 1 T and a low magnetic loss (W) of 30.56 w/kg at 20 mT and 100 kHz.