Abstract: The influence of preannealing (410⁰C, 1-3h) of amorphous Fe_73.5Cu₁Mo₃Si_13.5B₉ alloy on the formation of nanocrystalline structure in the alloy annealed at 480⁰C has been investigated by X-ray diffraction, electron diffraction, and transmission electron microscopy. Experimental results show that the preannealing has an obvious effect on the formation of nanocrystalline Fe_73.5Cu₁Mo₃Si_13.5B₉ alloy. The grain size of α-Fe(Si) crystalline phase in the Fe_73.5Cu₁Mo₃Si_13.5B₉ alloy annealed at 480⁰C for one hour decreases from 15nm to 8nm with increasing preannealing time to 3 hours. The nucleation rate and volume fraction of α-Fe(Si) phase increase with preannealing amorphous Fe_73.5Cu₁Mo₃Si_13.5B₉ alloy at 410⁰C. The nanocrystalline Fe_73.5Cu₁Mo₃Si_13.5B₉ alloy with a maximum initial permeability of 9.8×10⁴ has been prepared by preannealing amorphous Fe_73.5Cu₁Mo₃Si_13.5B₉ alloy at 430⁰C for four hours and then annealing the alloy at 510⁰C for ten minutes.