High permeability magnetic films can enhance the inductance of thin-film inductors in DC-DC converters. In order to obtain high permeability, the uniaxial anisotropy and coercivity should be as low as possible. This study employed dc reactive magnetron sputtering to fabricate nanocrystalline FeHfN thin films. The influence of the nitrogen flow on the composition, microstructure, and permeability characteristics, as well as magnetic properties was investigated. Increasing the nitrogen content can alter FeHfN films from amorphous-like to crystalline phases. The magnetic properties and permeability depend on variations in the microstructure. With the optimum N-2/Ar flow ratio of 4.8% (N-2 flow: 1.2 sccm), low anisotropy (H-K = 18 Oe), low coercivity (H-C = 1.1 Oe) and high permeability (mu' > 600 at 50 MHz) were obtained for fabrication of a nanocrystalline FeHfN film with a thickness of around 700 nm. Such as-fabricated FeHfN films with a permeability of over 600 should be a promising candidate for high-permeability ferromagnetic material applications. Crown Copyright (C) 2011 Published by Elsevier B.V. All rights reserved.