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PROBLEM TO BE SOLVED : To provide magnetic powder having a minute average particle size and especially magnetic characteristics for enabling high-density magnetic recording, and to provide a method for manufacturing the magnetic powder and a magnetic recording medium having the magnetic powder.SOLUTION : The rare-earth transition metal-based alloy magnetic powder or its nitride have an average particle size of 5-20 nm and a coercive force of 125-400 kA/m. The magnetic powder is obtained by coating the surface of a transition metal oxide particle containing rare-earth elements with an alkali earth metal hydroxide layer, heating it, performing vapor phase reduction and slow oxidization, and further executing a reduction diffusion method. Then, the nitride is subjected to a nitriding reaction. The magnetic recording medium has a magnetic layer containing the magnetic powder and a binder on a nonmagnetic support.