PURPOSE: To produce a magnetic paint with which a magnetic recording medium can be made which is excellent in the dispersion, squareness ratio and orientation ratio, by dispersing magnetic iron oxide into a polyurethane resin, and then dispersing the mixture into a vinyl chloride/vinyl acetate copolymer.

CONSTITUTION: A polyurethane resin having a softening temperature of about 150°C or below, an average molecular of about 10,000W200,000 and a degree of polymerization of about 200W2,000 (e.g. Nippolan 3113, a product of Nippon Polyurethane Industry Co.) in an organic solvent (e.g. mixed MIBK/toluene/ cyclohexanone solvent) and magnetic iron oxide are kneaded in a ball mill or the like to obtain a primary dispersion. Then a vinyl chloride/vinyl acetate copolymer (e.g. VAGH, a product of VCC Co.) is added to the primary dispersion, and the mixture is kneaded to disperse secondarily the magnetic iron oxide to obtain a magnetic paint.