The effect of rapid annealing on the structural and magnetic properties of melt-spun Fe-B based alloys has been investigated. The grain size of a Fe85B13Ni2 alloy after primary crystallization is reduced significantly by rapid annealing, and a low coercivity of 4.6 A/m and a high saturation magnetization of 1.90 T are obtained. This saturation magnetization is comparable to those of Si steels (1.8-2 T). The core losses of nanocrystalline Fe85B13Ni2 are lower by 60%-80% as compared with those of commercial Si steels. Rapid annealing is found to be effective in realizing a magnetically soft nanostructure without Cu addition, leading to an exceptionally low content of nonmagnetic additives (2.8 wt. %) and thus a high saturation magnetization in the nanostructure.