A method of manufacturing a high permeability amorphous magnetic alloy is disclosed. In the method amorphous magnetic alloy ribbon prepared by quenching a melt of raw material is annealed at an elevated temperature lower than a crystallization temperature of the alloy, in a magnetic field. During the annealing, the alloy ribbon and the direction of the magnetic field are relatively rotated with each other. The method is especially useful to an amorphous magnetic alloy having high saturation magnetic induction where the magnetic Curie temperature of the alloy usually exceeds the crystallization temperature of the alloy.