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Bulk nanocrystalline Fe88Si12 alloy is fabricated by a combustion synthesis processing that is convenient, low in cost, and capable of being scaled up. The Fe88Si12 alloy consists of two phases: ??-Fe(Si) and Fe3Si. It is a composite structure of meshwork dispersed in a matrix. The meshwork is a few micrometers in length and 0.5-1 ??m in diameter, and the grain size of the matrix is in the range of 5-15 nm. The nanocrystalline Fe88Si12 alloy is yielded at 1760 MPa with a large ductility of 14.6% in compressive test. Moreover, the coercive force of the product is approximately 3.6 A/m and saturation magnetization is about 196 emu/g. The results suggest that the product exhibits good mechanical behavior and soft magnet properties.