The morphology, microstructure and magnetic properties in 1K107 alloy annealed by nitrogen and transversal magnetic (N2) are studied. The results show that coercivity (Hc), remanence ratio (Br/Bs), core loss (Pc), and effective permeability (μe) are efficiently optimized by transversal magnetic annealing (N2) according to the methods of digital electric bridge, rectifier bridge, X-ray diffraction (XRD), and field emission scanning electron microscopy (FESEM), etc.