Sodium nitrate passivation has been developed as a new insulation technology for the production of FeSiAl soft magnetic composites (SMCs). In this work, the evolution of coating layers grown at different pH values is investigated involving analyses on their composition and microstructure. An insulation coating obtained using an acidic NaNO₃ solution is found to contain Fe₂O₃, SiO₂, Al₂O₃, and AlO(OH). The Fe₂O₃ transforms into Fe₃O₄ with weakened oxidizability of the NO₃^– at an elevated pH, whereas an alkaline NaNO₃ solution leads to the production of Al₂O₃, AlO(OH), and SiO₂. Such growth is explained from both thermodynamic and kinetic perspectives and is correlated to the soft magnetic properties of the FeSiAl SMCs. Under tuned passivation conditions, optimal performance with an effective permeability of 97.2 and a core loss of 296.4 mW∙cm⁻³ is achieved at 50 kHz and 100 mT.