A process for the manufacture of acicular magnetic gamma-iron(III) oxide by reducing acicular alpha-iron(III) oxide to magnetite and then oxidizing it to gamma-iron(III) oxide, wherein the alpha-iron(III) oxide is treated with a water-soluble alkaline earth metal compound and an alkylphenol with one to three alkyl radicals, each of 4 to 24 carbon atoms, on the benzene nucleus. Gamma-iron(III) oxides manufactured in this way show better magnetic orientability in the binder-containing dispersion, and a higher coercive force than prior art magnetic pigments.