13Cr-1.5Nb-Fe alloy powder prepared by water atomizing method is reduced with flowing hydrogen gas. The characteristics of a reduced alloy powder is investigated and magnetic cores formed by using the reduction power sintered in the vacuum of ∼10$^$-5/ Torr. In order to study on the magnetic cores permeability and power loss in alternating magnetic field are also measured. The result of particle size distribution shows the paticle size is 70 ㎛ at volume fraction of 50 %. The saturation magnetization of the reduced alloy powder is 160 emu/g. The relative peak permeability (H$\_$a/=5Oe) of a magnetic core is 400 and the power loss (B$\_$m/=80G) 0.12 mW/cc at sintering temperature of 1,200 $^{C}$, 10 ton/㎠ forming pressure, and 1 kHz.