In this paper, the copper composite wires of 75 μm in diameter with a sputtered layer of Ni80Fe20 permalloy were prepared, with a DC current applied to the basal Cu terminals during the fabrication process. The influence of the DC current on the magnetic configuration and Magneto-Impedance (MI) effect was studied. The results indicate that both the current amplitude and actuation duration have significant effect on the magnetic properties of the Ni80Fe20 layer. With appropriate current applied, the induced magnetic field leads to a circumferential magnetic domain structure and reduces significantly the equivalent anisotropy field of Ni80Fe20 layer. Then, the GMI ratio of the composite wires was significantly increased. A maximum GMI of 194.8% can be reached when the current was fixed at 100 mA and the Ni80Fe20 thickness is 780 nm. If the Ni80Fe20 thickness is above 780 nm, the coercivity of the coating layer increases while the GMI ratio of the composite wire reduces, since the magnetic anisotropy of the Ni80Fe20 layer varies from circumferential to longitudinal. The results were explained combining the thermal and magnetic effects of current.