The microstructure and magnetic properties of polycrystalline Fe films have been investigated in detail by controlling the condition of ion-beam sputtering with an Ar bombardment with a constant ratio of arrival rate of Fe to Ar. To control the Fe crystallite size, Fe films have been deposited at an Ar bombardment voltage VA in the range of 80–2000 V with the condition that the ratios of the arrival rate RA (atoms of Fe/atoms of Ar) were 1 to 1 (RA of 1) and 1 to 0.1 (RA of 0.1). Fe films with excellent soft magnetic characteristics for 4πMs of about 21.5 kG and HC of 2.5 Oe were deposited on the substrate bombarded by Ar ions with VA of 200 V at Rs of 1 and 400 V at RA of 0.1. The Ar bombardment had the two effects of raising the local temperature of the film surface and decreasing the Fe crystallite size. The orientation of crystals in the films may be related to the bombardment energy and amount of Ar ions. The high-energy bombardment formed a mixing layer between the deposited film and the surface of the substrate. These results imply that Ar bombardment by the proper energy and amount of Ar ions assists in improving the soft magnetic properties in the films. © 1997 American Institute of Physics.