Soft magnetic powder cores are used for electromagnetic conversion coils, which are essential parts in automotive, home appliance, and other electronics industries. These cores are manufactured through the process of compacting pure iron powder covered with an insulation layer, and are distinguished by high electromagnetic conversion efficiencies. However, soft magnetic powder cores suffer from one problem: their electromagnetic conversion efficiencies drastically decrease when they are subjected to conventional finishing processes. This is directly attributable to the formation of conductive layers on finished surfaces, which significantly reduce the electrical resistance of material surfaces. As a solution to this problem, we developed an electrolytic re-insulation grinding method that finishes materials while applying a current between the material and the grinding wheel. This method regenerates the insulation properties of soft magnetic powder cores through the electrolytic removal of conductive layers formed during finishing, thereby improving electrical resistance. This development enables the finishing of soft magnetic powder cores without compromising their electromagnetic conversion efficiencies.