A slab for an electrical steel sheet is heated at a temperature of 1280.degree. C. or below and then hot-rolled. The hot-rolled steel sheet or hot rolled and annealed steel sheet is then cold-rolled once or at least twice with intermediate annealing being performed between rollings. The cold-rolled sheet is decarburized and nitrided to form an inhibitor. The amount of nitrogen of in the steel sheet during the nitriding treatment subsequent to the decarburization annealing and the iron loss value after the withdrawal of the steel sheet from the furnace are measured to estimate the average diameter of a primary recrystallized grain, and next decarburization annealing is performed under conditions regulated in such a manner that the average diameter of the primary recrystallized grain of a product sheet falls within a proper range. The steel sheet subjected to the decarburization annealing is coated with an annealing separator composed mainly of MgO and then subjected to finish annealing.