The current study attempts to establish the interrelation between microstructure and magnetic properties induced during laser melting of the FeNi alloy. This study demonstrates the optimization of laser parameters for defect-free, uniform, and chemically homogeneous FeNi alloy synthesis. Mechanically alloyed FeNi (50−50 atom %) powders obtained after 12 and 24 h milling, with average particle sizes of 15 and 7 μm, were used as starting materials. It was found that the optimum range of laser power density for synthesis of dense and defectfree solids is between 1 and 1.4 J/mm 2 . For laser melting under similar conditions, 12 h milled FeNi powder produces a larger grain (∼100 μm) with a preferred texture of (001), compared to 25 μm grain size in 24 h milled FeNi, with random texture. Smaller grain size is correlated with higher resistance to domain wall movement, resulting in higher coercivity and remanence in the laser-melted samples prepared from 24 h of milled powder. The presence of microtexture in laser-melted samples prepared from 12 h milled powder is related to a higher anisotropy.