Keeping　a　high　proportion　of　soft　magnetic　phase　with　small　grain　size　and　uniform　distribution　of　soft　and　hard　magnetic　phase　is　the　key　factor　to　fabricate　bulk　nanocomposites.　We　report　a　novel　design　to　fabricate　high　performance　SmCo5/alpha-Fe　nanocomposites　by　choosing　nanoscale　alpha-Fe　flakes　as　raw　material　of　soft　magnetic　phase　instead　of　micron　scale　alpha-Fe　particles.　Microstructure　optimization,　i.e.,　fine　and　dispersive　distribution　of　alpha-Fe　grains　in　SmCo5　matrix,　and　high　soft　magnetic　phase　proportion　up　to　25　wt%　were　achieved　simultaneously.　As　a　consequence,　the　remanence,　intrinsic　coercivity,　and　maximum　energy　product　rise　by　13.55%,　46.99%,　and　80.03%　in　the　SmCo5/alpha-Fe　nanocomposites　with　20　wt%　alpha-Fe,　respectively.　Moreover,　a　giant　remanence　of　9.75　kG　is　achieved　in　the　SmCo5/alpha-Fe　nanocomposite　with　25　wt%　alpha-Fe　nanoflakes　content.