The invention belongs to the technical field of alloy soft magnetic powder cores and particularly relates to a production method of an ultrahigh magnetic permeability of iron-based nanocrystalline magnetic powder core. The production method comprises step 1, performing mechanical crushing treatment on an iron-based nanocrystalline thin belt so as to obtain iron-based nanocrystalline powder; step 2, screening and matching the iron-based nanocrystalline powder and mixing into mixed powder which is formed by coarse powder and fine powder; step 3, performing passivation, coupling and insulation coating treatment on the mixed powder in turn through a passivation agent, a coupling agent, an insulating agent and a binding agent and performing compression forming; step 4, performing annealing treatment and spraying insulation treatment on the formed magnetic powder core in turn. According to the production method of the ultrahigh magnetic permeability of iron-based nanocrystalline magnetic powder core, the coarse powder and fine powder mixing and coupling treatment is adopted and accordingly the problem of the compression forming of large particle nanocrystalline powder can be effectively solved and the ultrahigh magnetic permeability of iron-based nanocrystalline magnetic powder core can be produced, wherein the magnetic permeability can reach more than 200.