Disclosed are an amorphous iron based alloy having excellent magnetic characteristics as well as bendability and a method of manufacturing the amorphous iron based alloy. The amorphous iron based alloy has a mean centerline Ra surface roughness of about 0.8 .mu.m or less and the formula Fe.sub.X B.sub.Y Si.sub.Z Mn.sub.a in approximate proportions wherein:75.ltoreq.X.ltoreq.82 at %7.ltoreq.Y.ltoreq.15 at %,7.ltoreq.Z.ltoreq.17 at %, and0.2.ltoreq.a.ltoreq.0.5 at %.The method of manufacturing the amorphous iron based alloy comprises quenching and solidifying a molten alloy having the formula Fe.sub.X B.sub.Y Si.sub.Z Mn.sub.a in approximate proportions wherein:75.ltoreq.X.ltoreq.82 at %7.ltoreq.Y.ltoreq.15 at %,7.ltoreq.Z.ltoreq.17 at %, and0.2.ltoreq.a.ltoreq.0.5 at %, andeffecting the quenching and solidifying steps in a Co.sub.2 atmosphere containing H.sub.2 in an amount of about 1-4% by volume.