A Ni--Fe magnetic alloy consists essentially of: 77 to 80 wt. % Ni, 3.5 to 5 wt. % Mo, 1.5 to 3 wt. % Cu, 0.1 to 1.1 wt. % Mn, 0.1 wt. % or less Cr, 0.003 wt. % or less S, 0.01 wt. % or less P, 0.005 wt. % or less 0, 0.003 wt. % or less N, 0.02 wt. % or less C, 0.001 to 0.05 wt. % Al, 1 wt. % or less Si, 2.6-6 of the weight ratio of Ca to S, (Ca/S), and the balance being Fe and inevitable impurities, satisfies an equation of 3.2.ltoreq.(2.02.times.�Ni!-11.13.times.�Mo!-1.25.times.�Cu!-5.03.times.�Mn!)/(2.13.times.�Fe!).ltoreq.3.8; and has a Mo segregation ratio defined by a seregration equation satisfying 5% or less, the seregration equation being .vertline.(Mo content in a segregation region-Mo average content)/(Mo average content).vertline..times.100%. A method for producing a magnetic Ni--Fe alloy comprises the steps of: a first heating step of heating an alloy ingot to 1200.degree. to 1300.degree. C. for 10 to 30 hrs; slabbing the heated ingot at a finishing temperature of 950.degree. C. or more to produce a slab; a second heating step of heating the slab at 1150.degree. to 1270.degree. C. for 1 to 5 hrs; and hot rolling the heated slab at a finishing temperature 950.degree. C. or more.