We have investigated the magnetic properties of a Co36 Fe36 Si4 B20 Nb4 alloy developed for high temperature soft magnetic applications. Studies of the crystallization of the alloy, prepared in the form of amorphous ribbons by melt-spinning, were performed using differential scanning calorimetry and X-ray diffraction. These studies, and further validation by transmission electron microscopy, suggested the formation of (CoFe)2 Si nanoparticles dispersed in an amorphous matrix during the first stage of crystallization which occurred at around 845 K. The formation of this nanocrystalline state by annealing at temperatures between 825 and 875 K not only raised the Curie temperature of the material to above 1000 K but also gave superior soft magnetic properties with a coercivity less than 50 A/m (625 mOe). However, at higher annealing temperatures, formation of strongly anisotropic phases with out of plane domain magnetization, observed by magnetic force microscopy, resulted in deterioration of the soft magnetic properties. © 2007 Elsevier B.V. All rights reserved.