Thin films of Fe-Zr-N were fabricated by rf magnetron reactive sputtering method. The saturation magnetization and coercivity as functions of annealing temperature and partial pressure of nitrogen gas, effective permeability at high frequencies, and thermal stability were investigated. Magnetic softness was exhibited in the composition range of $Fe_{72-78}Zr_{7-10}N_{15-18}$ which was boundary between polycrystalline and amorphous structure. These films exhibited magnetic softness with saturation magentic flux density of 1.55 T and effective permeability of about 3000 at 1 MHz. These films also exhibited thermal stability by sustaining effective permeability of 2500 or above as the temperature was raised to $550^{circ}C$. It is asswned that good magnetic softness is obtained because grain growth of $alpha-Fe$ is prohibited due to the precipitation of ZrN nanocrystals. The grain sizes of $alpha-Fe$ films were $40~50AA$ and the grain sizes of ZrN nanocrystals were $10~15AA$.