A process for producing a ferromagnetic metal powder composed mainly of iron and having an oxidized coating and a superior dispersibility is provided, which process comprises feeding granules of a ferromagnetic metal powder composed mainly of iron and impregnated with an organic solvent into a horizontal, cylindrical, rotating type reactor having scraping plates fixed onto the inner wall thereof in parallel to the generating line thereof, passing an oxygen-containing gas through the reactor while rotating the reactor and keeping the inside temperature thereof at 10° to 80°C to vaporize off the solvent and dry the granules, and then continuously or stepwise raising the temperature of the resulting material on heating while passing an oxygen-containing gas through the inside of the reactor.