The amorphous precursors Fe81–x –y Nix Coy Zr7B12 (x = 50, 40, 30, 20; y = 0, 10, 20), prepared by the melt quenching technique, have been characterised in terms of their ability to form nanocrystalline grains on annealing. The crystallisation process was studied in detail using Mössbauer spectroscopy, X‐ray diffraction (XRD) and differential scanning calorimetry measurements. The crystalline phases formed were identified and their transformation versus annealing temperature was followed. Bulk and surface crystallisation of amorphous precursors was compared using conversion electron Mössbauer spectroscopy. The size of nanograins was estimated from the XRD results using the Scherrer formula. The magnetic properties of amorphous and nanocrystalline Fe81–x –y Nix Coy Zr7B12 alloys were studied using an unconventional ‘rf‐Mössbauer’ technique. The rf‐Mössbauer technique provides information on the soft magnetic behaviour of alloys. The rf sidebands observed are directly related to magnetostriction and their presence provides a good test for the formation of the nanocrystalline alloy. The rf‐Mössbauer results revealed that the anisotropy field increased significantly with the introduction of Co. The rf‐Mössbauer measurements were accompanied by conventional measurements of hysteresis loops that fully supported the rf‐Mössbauer results. (© 2007 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)