In this paper, first the development process of a soft magnetic composite material for use in motor applications is described. Various mixtures are prepared to identify an optimum mix. It is found that highest packing is achieved for a mixing ratio of 45 % of 170 mesh particle size with 55 % 325 mesh particle size. The coating of the particles is obtained by using the "wetting method". The mechanical properties of the samples; such as stress versus strain, Strain% versus composition%, etc. are given, also surface characterization is carried out by XPS. This is followed by a series of tests to determine the magnetic properties of the material produced. It is shown that the results obtained are as successful as the best commercial samples available in the market. (c) 2004 Elsevier B.V. All rights reserved.