The objectives of this study are first, to expand our understanding of relationship between magnetic properties and microstructural features such as grain size and texture, and second to reduce core loss of Fe-6.5%Si strip through optimizing heat treatment conditions. A rapid solidification technique, planar flow casting(PFC), was adopted to produce Fe-6.5%Si strips. The strips were heat treated under various conditions. The results show that heat treatment conditions can change not only grain size but also (200) texture formation on the strip surface. Variation in magnetic properties of Fe-6.5%Si strip is analyzed in terms of the change in grain size as well as (200) texture on the strip surface. The heat treatment conditions of 1100℃ over 2hr or 1150℃ 1∼2hr in N₂＋ 5%H₂appear to minimize core loss of Fe-6.5%Si strips.