This article begins by introducing the importance of electrical steels in their application as electrical machine cores. Nonoriented, grain‐oriented, and high‐silicon steels comprise over 97% of the world's production of soft magnetic materials. The origin, controlling factors, and methods of optimizing their most important magnetic parameter, the core loss, are discussed. The effect of magnetizing frequency, flux density, mechanical stress, temperature, and flux distortion is shown. Magnetostriction is a further factor of importance in many devices, so this is briefly discussed. There is a growing interest in predicting the losses of electrical steels, so the need for better understanding of magnetization processes to build accurate models which will cater to the more stringent specifications of modern industry are discussed, and new approaches are reviewed. Powder composite materials are finding niche applications in power devices, so their magnetic properties are compared with those of the traditional lamination steels. The paper does not cover magnetically soft ferrites or iron–cobalt alloys which are used in specialized power magnetic applications.