In order to solve the problem of the magnetic property deterioration of the amorphous cores annealed under high absolute water content condition, the deterioration mechanism was studied by using the SEM and X-ray diffraction equipment. The experimental results indicate that the magnetic properties deterioration of the amorphous cores is mainly related with the oxidation of the amorphous cores. It has been found that the oxidation occurred on the surface of the annealed amorphous materials. What’s more, the oxidation formed at the defects of the amorphous materials in priority. Thus the surface quality has a major impact on the oxidation and the magnetic properties deterioration. By analysis of the possibility of the chemical reaction, it is believed that the oxidation is caused by the Fe or B reaction with H2O. With the holding time increased, the oxides size and quantity increased. To reduce the influence of the H2O in the air on the magnetic properties deterioration of the amorphous materials during heat treatment, the experiment by aerating the N2 to the heat treatment furnace was performed. The experiment result proves that the magnetic properties of the amorphous cores were improved during annealing in N2, which almost reaches the same level of the amorphous cores annealed under low absolute water content condition.