Powder metallurgical studies were made on Mn-Zn ferrites having fine grains. Fine powder is needed to get a dense ferrite with fine grains. We prepared experimentaly fine powder using a media agitation mill. The ferrites with grain size of sub-micron range had a linear relationship between initial permeability and mean grain size. Initial permeability of Mn-Zn ferrite with grain size as much as 0.7 μm was 330.