The specialized technique of radio‐frequency‐induced collapse of Mössbauer spectra combined with conventional Mössbauer spectroscopy, x‐ray diffraction (XRD), small‐angle x‐ray scattering (SAXS), and differential scanning calorimetry (DSC) are used to investigate in detail the magnetic and structural properties of the two magnetic materials Fe81Zr7B12 and Fe79Zr7B12Cu2. Thermal treatments to convert the as‐quenched, fully amorphous state into mixtures of nanocrystalline and amorphous states and the effect of the small Cu addition were of primary interest due to the improved magnetic behavior in the mixed state. DSC shows that the Cu leads to a lowering of the onset temperature for formation of the nanocrystalline phase and also to an increase in the range of temperatures over which this phase forms. XRD and Mössbauer data show the nanoscale phase to be bcc Fe and the Mössbauer spectral parameters demonstrate it to be essentially pure Fe (i.e., with little or no Zr, B, or Cu substitutional impurities). The electron density contrast between the amorphous matrix and the bcc Fe permits the detection of the Fe grains by SAXS and significant volume fractions with sizes of only 2.8–8 nm are shown to exist. Larger sizes are also present as demonstrated by the XRD and Mössbauer data and a bimodal size distribution is suggested. The Mössbauer experiments in which the radio‐frequency‐induced effects (rf collapse and rf sidebands) are used, allows the nanocrystalline bcc phase to be distinguished from magnetically harder microcrystalline α‐Fe. The complete rf collapse of the magnetic hyperfine structure occurs only in the amorphous and nanocrystalline phases and is suppressed by the formation of larger grains. The rf sidebands disappear when the nanocrystalline phase is formed, rev- ealing that magnetostriction vanishes. The rf‐Mössbauer studies are shown to be particularly sensitive to magnetic softness of the material in that large changes in the spectra are observed for applied field changes as small as 2 Oe. © 1996 American Institute of Physics.