Magnetic iron fine-particles are industrially produced from acicular goethite fine-particles through three chemical reaction paths: goethite dehydration, hematite reduction and magnetite reduction. In this study, in order to improve the coercivity of the particles, we carried out experiments on production of magnetic iron fine-particles under various reaction conditions. Experimental results shaw that the coercivity of iron fine particles depends strongly on the temperature for the magnetite reduction. At the magnetite reduction temperature of 450 degreesC, the coercivity of the products consisting of acicular primary par-tides reaches a maximum value of 126 kA/m. When the mole fraction of hydrogen in the supplied gas or reaction temperature for hematite reduction decreases, hematite is reduced not to iron directly but to magnetite intermediately. Particularly, when hematite is reduced to magnetite under hydrogen atmosphere accompanied with additional water vapor, iron fine particles compactly composed of smaller crystalline with higher coercivity are obtained after further reduction of those magnetite.