In order to improve the homogeneity of spherical Fe-rich particles within the Cu-rich matrix, the Cu95Fe5 (wt%) immiscible composite coating has been produced by the combination of mechanical alloying and laser cladding. The results show that the milled composite powder presents a polygonal morphology and is mainly composed of face-centered-cubic (fcc)-Cu solid solution. The demixing or delimitation is eliminated in the immiscible composite coating produced by laser cladding and large amounts of spherical α-Fe particles are dispersed within the ε-Cu matrix as a result of liquid phase separation (LPS). The size of the Fe-rich particles measured is in radius of ∼1.5 μm, which is much smaller than the calculated critical radius (∼2.3 μm), confirming that the α-Fe particles containing a supersaturated Cu are driven by the dominant mechanism of Marangoni motion. Compared to Brass, the immiscible composite coating exhibits the improved homogeneous microhardness (153HV0.2) and higher corrosion resistance, as well as a saturated magnetization of ∼9.19 emu/g and low coercivity of ∼9.25 Oe. Display omitted •Homogeneous immiscible coating is produced by mechanical alloying and laser cladding.•Many α-Fe particles with a diameter of ∼3 μm are dispersed within the ε-Cu matrix.•Immiscible coating has higher microhardness and corrosion resistance than Brass.•Immiscible coating exhibits a saturated magnetization of ∼9.19 emu/g.•Immiscible coating exhibits a low coercivity of ∼9.25 Oe.