Electrical steels are the most important magnetic materials produced in Europe where the total sales market is around E400 million per annum. Its main use is as the magnetic core material of rotating machines and transformers. When magnetised in such equipment, it dissipates iron losses (as heat) which use up around 5% of all the energy generated in the UK. Over the past 20 years, the quality of electrical steels has improved vastly, because of improved manufacturing techniques and a better understanding of factors which control the magnetic properties. The paper reviews the development of electrical steels from hot-rolled silicon iron, first produced around 1905, through the discovery of grain-oriented steels in the late 1930s, to the modern domainrefined high-permeability materials and low-loss nonoriented steels. This is followed by a discussion of the most important factors which affect the properties of modern electrical steels. Amorphous magnetic materials are now competing in some of the markets traditionally monopolised by electrical steels. The paper reviews the existing status of amorphous materials compared to conventional electrical steels and concludes by considering how these and other competing materials might develop in the future.