In this work, a study of the stress relief in Finemet ribbons, Fe73.5Cu1Nb3Si16.5B6, as a function of the annealing temperature is presented. The as melt-spun samples are amorphous and become partially crystallized after annealing at appropriate temperatures. For temperatures TA⩾480 °C the samples are nanocrystalline, with a microstructure composed by α-Fe1−xSix (x∼0.2) crystallites (10 nm average diameter) embedded in an amorphous matrix. Nanocrystallization, associated with stress relief effects, improves the soft magnetic properties of this kind of material. The stress level was quantified using magnetorestriction (measured by SAMR), magnetoelastic anisotropy, and domain wall energy data obtained from impedance spectra measurements. A reduction of the internal stress from 15 to 0.2 MPa was verified when comparing the as-cast to the sample annealed at 580 °C. Improvement of the magnetic softness of the samples was also followed by the increase of the domain wall and magnetization rotation contributions to the overall effective permeability.