The initial permeability of a composite assembly consisting of Fe and Fe3O4 particles whose average diameters were 1 μm and 10 nm, respectively, was investigated. It was found that the initial permeability is sensitively dependent on the volume ratio of Fe and Fe3O4. The effect is due to a specific structure of the composite assembly whereby Fe3O4 particles congregate in air gaps created by Fe particles, reducing the demagnetizing field of Fe particles. This result suggests that ferromagnetic particle assembly consisting of particles with large size difference may be a good high-frequency core material.