The 6.5wt %Si-Fe alloy sheets were made by the twin roll process. The magnetic properties and microstructures of sheets annealed in the sulfur atmosphere were studied. In the as-prepared sheet, non-oriented columnar grains about $10{mu}m$ in diameter were observed, which grew from the surface to the inner part of the sheet. When the annealing temperature was around $700^{circ}C$, the primary recrystallization was formed around the middle part of the sheet thickness, and the grain size increased with increasing annealing temperature. At the annealing temperature of $900^{circ}C$, the grain size became $30{sim}40{mu}m$. Around the annealing temperature, the motive force of the grain growth is the grain boundary energy. However, above $1000^{circ}C$ the surface energy played an important role in the observed grain growth. When the sheet were annealed at $1200^{circ}C$, the grains whose (100) planes were paralled to the thin plate surface grew, and all sheet surfaces were covered with these grains after 1 hour annealing. This phenomenon is called tertiary recrystallization. A difference in surface energy between (100) and (110) surfaces provides a driving force for growth of tertiary grains. The coercive force was 0.27 mOe and the AC core loss $W_{12/50}$ was 0.38w/kg for the 6.5wt%Si-Fe alloy.