Soft magnetic powder cores are made by pressurizing and molding pure iron powder covered with insulation film. These materials are used as components of electromagnetic converter parts. The recent stringent requirements for performance and dimensional accuracy necessitate new processing technology to achieve the required levels of both magnetic performance and surface quality of the material. However, processing of soft magnetic powder cores can result in degradation of magnetic performance and/or chipping or plucking of the ground surface due to mechanical damage of the insulation film and/or loss of structural particles from the material due to the increase in grinding resistance. Basic studies were performed to examine various grinding conditions and wheels that could affect the quality of the material with a view toward eliminating these problems. Factors affecting the surface quality were identified, and a method to achieve greater surface quality is proposed.