Novel fluffy Fe@α-Fe2O3 core-shell nanowires have been synthesized using the chemical reaction of ferrous sulfate and sodium borohydride, as well as the post-annealing process in air. The coercivity of the as-synthesized nanowires is above 684 Oe in the temperature range of 5 to 300 K, which is significantly higher than that of the bulk Fe (approximately 0.9 Oe). Through the annealing process in air, the coercivity and the exchange field are evidently improved. Both the coercivity and the exchange field increase with increasing annealing time (TA) and reach their maximum values of 1,042 and 78 Oe, respectively, at TA = 4 h. The magnetic measurements show that the effective anisotropy is increased with increasing the thickness of theα-Fe2O3 by annealing. The large values of coercivity and exchange field, as well as the high surface area to volume ratio, may make the fluffy Fe@α-Fe2O3 core-shell nanowire a promising candidate for the applications of the magnetic drug delivery, electrochemical energy storage, gas sensors, photocatalysis, and so forth.