AbstractThe prevalence of wide‐bandgap (WBG) semiconductors allows modern electronic devices to operate at much higher frequencies. However, development of soft magnetic materials with high‐frequency properties matching the WBG‐based devices remains challenging. Here, a promising nanocrystalline–amorphous composite alloy with a normal composition Fe_75.5Co_0.5Mo_0.5Cu₁Nb_1.5Si₁₃B₈ in atomic percent is reported, which is producible under industrial conditions, and which shows an exceptionally high permeability at high frequencies up to 36 000 at 100 kHz, an increase of 44% compared with commercial FeSiBCuNb nanocrystalline alloy (25 000 ± 2000 at 100 kHz), outperforming all existing nanocrystalline alloy systems and commercial soft magnetic materials. The alloy is obtained by a unique magnetic‐heterogeneous nanocrystallization mechanism in an iron‐based amorphous alloy, which is different from the traditional strategy of nanocrystallization by doping nonmagnetic elements (e.g., Cu and Nb). The induced magnetic inhomogeneity by adding Co atoms locally promotes the formation of highly ordered structures acting as the nuclei of nanocrystals, and Mo atoms agglomerate around the interfaces of the nanocrystals, inhibiting nanocrystal growth, resulting in an ultrafine nanocrystalline–amorphous dual‐phase structure in the alloy. The exceptional soft magnetic properties are shown to be closely related to the low magnetic anisotropy and the unique spin rotation mechanism under alternating magnetic fields.