NiZn ferrites were selected as coating agents to prepare NiZn/FeSiAl soft magnetic composites (SMCs) in order to improve the soft magnetic property. It is based upon the higher permeability of magnetic NiZn ferrites than that of traditional nonmagnetic coatings, and also relative higher resistance than that of MnZn ferrites. The effects of molding pressure, annealing temperature, and content of insulation on the magnetic properties were studied. As molding pressure increases, the effective permeability increases firstly and then decreases, while the core loss shows a reverse trend, and both get the best performance at 1.6 GPa. With increasing temperature, the permeability increases, reaches the maximum value at 660 °C and then decreases, while the core loss has a reverse trend, and both get the minimum value at 700 °C. The permeability increases with increasing NiZn from 0.1% to 3%, and then decreases. The D-C bias property of FeSiAl SMCs increases with increasing both mica and NiZn content. The larger resistance of mica also causes the better D-C bias property.