PURPOSE: To produce a steel sheet excellent in magnetic shielding property by applying hot rolling, cold rolling, and annealing to a slab of a steel with a specific composition to form a primary recrystallized structure of specific grain size and subjecting the resulting rolled sheet to cold forming and then to annealing in a specific temp. region.

CONSTITUTION: A slab or ingot of a steel which has a composition containing, by weight ratio, ≤4.5%, in total, of Si and/or Al as alloying elements and also containing, other than the above, 0.010-0.5%, in total, of one or more elements selected from B, Al, Ti, V, Cr, Mn, Co, Ni, Cu, Zr, and Nb as crystalline grain growth inhibiting components and 0.005-0.2%, in total, of one or more elements selected from Se, C, and N is prepared. Subsequently, this slab or ingot is heated to 1000-1400°C to undergo hot rolling, cold-rolled once or cold-rolled twice or more while process-annealed between the cold rolling stages by regulating the reduction of area in the final cold rolling to 40-95%, and annealed, by which a steel sheet having a primary recrystallized structure of ≤30μ average crystalline grain size is formed. This steel sheet is formed into the desired shape by means of cold working and then annealed at 850-1200°C for 10min-50hr.