A magnetic material is provided that has an iron oxide phase whose principal phase is a crystal of a structure which has the same space group as ε-Fe2O3 crystal and in which Al is substituted for a portion of the Fe sites of the ε-Fe2O3 crystal. The molar ratio of Al to Fe in the iron oxide phase, when expressed as Al:Fe=x:(2−x), satisfies 0≦x≦1. The value of x is preferably in the range of 0.3 to 0.7. The average particle diameter of the powder determined from a TEM image is preferably 5 to 200 nm, more preferably 10 to 100 nm. The magnetic material has very high practical value because it enables the extremely high coercive force Hc of the ε-Fe2O3 crystal to be regulated to a level enabling utilization in magnetic recording medium and various other applications. The magnetic powder can be produced by a method combining the reverse micelle method and the sol-gel method.