A series of inorganic and organic-inorganic hybrid silica coatings were synthesised by a sol-gel process from tetraethoxysilane (TEOS) and methyltrimethoxysilane (MTMS) precursors, and used to investigate their effectiveness as insulation materials in dielectromagnetic soft magnetic composites. The coating materials and coated iron powders were analysed by FTIR, electron and atomic force microscopy. Results showed that introduction of the organic phase imparted desirable hydrophobicity and flexibility to the coating, whilst still providing effective electrical insulation at temperatures up to 500 °C. The hybrid coatings covered the iron particle surface very effectively and formed continuous coatings that could remain intact even after compaction at pressures up to 900 MPa, depending on the coating amount. Initial magnetic characterisations are also encouraging. As a result, such hybrid-coated iron powders can be considered suitable candidates as heat-treatable high-performance dielectromagnetics.