The magnetoelastic materials find many practical applications in everyday life like transformer cores, anti-theft tags, and sensors. The sensors should be very sensitive so as to be able to detect minute quantities of miscellaneous environmental parameters, which are very critical for sustainability such as pollution, air quality, corrosion, etc. Concerning the sensing sensitivity, the magnetoelastic material can be improved, even after its production, by either thermal annealing, as this method relaxes the internal stresses caused during manufacturing, or by applying an external DC magnetic bias field during the sensing operation. In the current work, we performed a systematic study on the optimum thermal annealing parameters of magnetoelastic materials and the Metglas alloy 2826 MB3 in particular. The study showed that a 100% signal enhancement can be achieved, without the presence of the bias field, just by annealing between 350 and 450 °C for at least half an hour. A smaller signal enhancement of 15% can be achieved with a bias field but only at much lower temperatures of 450 °C for a shorter time of 20 min. The magnetic hysteresis measurements show that during the annealing process, the material reorganizes itself, changing both its anisotropy energy and magnetostatic energy but in such a way such that the total material energy is approximately conserved.