Soft and hard magnetic components are produced from a large number of ferrous-based materials processed through wrought as well as through powder metallurgy route. However, iron-phosphorous alloy system for the production of magnetic materials is not known in wrought processing route in spite of the fact that phosphorous as an alloying element has all the favourable characteristics to enhance magnetic properties of iron. This is because of the fact that in wrought route it is not possible to bring phosphorous in homogeneous solid solution with iron due to its segregation tendency during solidification of the melt. This renders the alloy completely useless not only from magnetic point of view but also from mechanical properties as well. Powder metallurgical (P/M) processing, on the other hand, due to predominantly its solid state processing approach, has been very successful in exploiting potential of Fe-P alloy systems for magnetic as well as mechanical applications. A large number of products such as magnetic cores of contactors and relays for DC voltage, cores of magnetic brakes of various time relays and electricity meters have come out of this system through P/M processing. Techniques are developed to reduce eddy current losses so as to use the material in AC applications.