A readout circuit in magnetic recording device is disclosed, in which a test data signal for detecting an error in the characteristics of an automatic equalizer is recorded in a predetermined position of each track of a magnetic recording medium. In readout mode, a test data signal for a selected track is read out first, and this signal is compared with a reference signal dependent on the system conditions to determine an error from the reference signal. The optimum equalization coefficient is determined to eliminate this error from the reference signal and set in the equalizer. The data is readout under the optimum equalization characteristics thus set.