A method of producing a liquid developer which comprises an insulation liquid and toner particles dispersed in the solution is provided. The method comprises the steps of: preparing a kneaded material containing a coloring agent and a resin material; dispersing the kneaded material into an insulation liquid to obtain a molten state kneaded material dispersed liquid in which the kneaded material in a molten state is finely dispersed; and cooling the molten state kneaded material dispersed liquid to solidify the molten state kneaded material; wherein the insulation liquid contains as its major component an unsaturated fatty acid. According to the method, it is possible to provide a liquid developer in which toner particles having a small particle size distribution and a uniform shape are dispersed so that properties of each component of the toner particles can be exhibited sufficiently. The liquid developer mentioned above is also harmless to environment.