The precursor prepared by coordinated co-precipitation was direct reduced by hydrogen to ultra-fine fibrous Fe-Ni alloy powder. The effects of concentrations of reactants, pH value, reaction temperature and additive on the preparation of precursor were systematically investigated. The structures, thermal decomposition processes and morphologies of the precursors were characterized by X-ray diffraction (XRD), thermal gravity-differential thermal analysis (TG-DTA) and scanning electron microscoy (SEM). The results show that using 2% polyvinylpyrrolidone (PVP) (in mass fraction) as additive, a well-dispersed precursor with a uniform morphology can be obtained in a solution with Fe2+ and Ni2+ total concentration (1:1) of 0.8 mol/L, pH value of 6.2 at 60 °C, and a pure and well dispersed fibrous iron-nickel powder can be prepared by direct reduction of this precursor in a mixed atmosphere of nitrogen and hydrogen at the temperature of 420 °C.