The iron-silicon-aluminum alloys (especially Sendust) have been widely used for the application requiring high saturation flux density, low coercive force and high electric resistivity. For this reason they have been appreciated for magnetic thin film heads, however, they are too hard and brittle to be made into thin film by rolling or three dimensional complex shaped products by mechanical work or conventional powder metallurgy process. The reduction in the size and weight of apparatus that can be accomplished by its use has had an important effect on technical developments. In this report, magnetic characteristics of Sendust ring samples produced by the powder metallurgy process with spray drying method were investigated. After gas atomized Sendust powders were mixed with paraffin compounds, these powders were granulated by spray drying method using organic binder consisting of poly (vinyl alcohol) (PVA) and plasticizer in the range from 0.1wt% to 0.5wt% of PVA, in order to improve the powder flowability and mechanical strength of green bodies. Results show that the present method is an excellent process for producing near-net-shape parts with high performance and high precision in dimension after sintering.