A method has been developed for preparing well-dispersed fine-particle magnetite by precipitationin situ. A solution of Fe++ and Fe+++ is formed into a sol by the addition of agar-agar and polyvinyl alcohol;magnetite particles are then precipitated by diffusing NaOH into the resulting semi-rigid gel. The size range of these particles is from 40 A to 800 A. Typical magnetite films exhibit a coercivity of about 50 oe,with a Br/Bs ratio of 0.4. A study of the precipitation reaction has shown that the properties of the resulting magnetic particles appear to be limited by factors intrinsic in the mechanism of the reaction rather than by the limitations imposed by the gel-resin system used.