A magnetic toner comprising magnetic toner particles containing at least a binder resin, a magnetic material containing a magnetic ion oxide, and a release agent. The magnetic toner has a weight-average particle diameter of from 3 nullm to 10 nullm, a magnetization intensity (saturation magnetization) of from 10 Am2/kg to 50 Am2/kg (emu/g) under application of a magnetic field of 79.6 kA/m (1,000 oersteds), an average circularity of 0.970 or more, a ratio of weight-average particle diameter to number-average particle diameter, of 1.40 or less, iron and an iron compound which stand liberated from the magnetic toner particles at a liberation percentage of from 0.05% to 3.00%, and a resin component having a tetrahydrofuran-insoluble matter in an amount of from 3% by weight to 60% by weight. Also disclosed is an image-forming method making use of the magnetic toner.