The aim of this work is to investigate the structure and magnetic properties of compacted microcrystalline NiFe (81 wt.% of Ni) powder. Bulk samples were prepared by compaction of milled NiFe (81 wt.% of Ni) ribbon. We found that after compaction of the powder displacement of domain walls becomes more dominant and the coercivity decreases and is comparable with the coercivity of conventional permalloy. The coercivity of the bulk material before heat treatment is lower than that for powder and that is why we can assume that the magnetic "contact" is restored after compaction. Annealing of bulk samples reduces the losses due to the relaxation of internal stresses induced by milling and compaction
