Innovative SMC with low iron loss was made from iron powders with evaporated MgO insulation coating. The coating had greater heat-resistance than conventional phosphatic insulation coating, which enabled stress relieving annealing at higher temperature. Magnetic properties of toroidal samples (OD35mm,ID25mm, t5) were examined. The iron loss at 50Hz for Bm = 1.5T was lower 50% of conventional SMC and was almost the same with silicon iron laminations(t0.35). It became clear that MgO insulation coating has enough heat resistance and adhesiveness to powdersurface to obtain innovative SMC with low iron loss.