In this study, ultra-fine soft-magnetic micro-powders are prepared by high-pressure gas atomization of an Fe-based alloy, Fe-Hf-B-Nb-P-C. Spherical powders are successfully obtained by disintegration of the alloy melts under high-pressure He or N2 gas. The mean particle diameter of the obtained powders is 25.7 μm and 42.1 μm for He and N2 gas, respectively. Their crystallographic structure is confirmed to be amorphous throughout the interior when the particle diameter is less than 45 μm. The prepared powders show excellent soft magnetic properties with a saturation magnetization of 164.5 emu/g and a coercivity of 9.0 Oe. Finally, a toroidal core is fabricated for measuring the magnetic permeability, and a μr of up to 78.5 is obtained. It is strongly believed that soft magnetic powders prepared by gas atomization will be beneficial in the fabrication of high-performance devices, including inductors and motors.