PURPOSE: To obtain a microencapsulated toner capable of forming a sharp color image by coating a core material contg. a transparent magnetic powder of a rare earth garnet or the like and a colorant with an outer shell.

CONSTITUTION: A magnetic microencapsulated toner capable of forming a sharp color image is obtained by mixing a transparent magnetic powder, such as rare earth garnet, ferromagnetic ferrite or the like amorphous magnetic powder, with a colorant, such as cadmium yellow, iron oxide red, or rhodamine lake to form a nonaqueous liquid dispersion, dispersing and emulsifying it into an aq. soln. of a film forming material, such as gum arabic, adding a soln. of a film forming material, such as gelatin, adjusted to pH, concn., and temp. same as those of this emulsion, then, acidifying the mixture to cause phase separation, cooling it, adding a hardening agent, such as formalin, and heating the mixture in alkali, and spray drying the microencapsulated dispersion thus obtained.