Water-atomized iron powder for powder metallurgy having a hardness of particle cross section of from about Hv 80 or higher to about 250 or lower, the iron powder having been atomized with water and dried, and having a particle surface covered with oxides which are reducible in a sintering atmosphere, and which has an oxygen content of 1.0 wt. % or less.The water-atomized ion powder can be made by an improved and simplified processing, and the cost of resulting sintered products is decreased as a result of its use.