A method of manufacturing a pneumatic tire provided with a magnetic portion containing powder particles of hard magnetic material in the tread portion which comprises a drilling step of drilling a hole in an unvulcanized tread portion forming member; a magnetic piece embedding step of embedding a magnetic piece containing the powder particles of hard magnetic material in the hole as the magnetic portion; a green tire molding step of molding a green tire using the tread portion forming member in which the magnetic piece is embedded; and a vulcanizing step of vulcanizing the green tire, and this method makes it possible to finish the tire in a designed shape without causing occurrence of abnormal unevenness on the surface, even when a magnetic piece for detecting a worn state of the tire is embedded.