The effect of milling conditions on microstructures and magnetic properties of MgCuZn ferrites has been studied with reference to the effect of water. It is shown that the ferrites made by dry grinding process are lower in magnetic properties than those prepared by wet grinding or those treated by water after dry grinding. It was also found that calcium sulfate had been formed during calcination. The calcium sulfate in ferrite powders treated by water after dry grinding is hemihydrous calcium sulfate, while that without treated by water is anhydrous calcium sulfate. After sintering, calcium sulfate was segregated at the grain boundary in the case of ferrite powder treated by water after dry grinding. On the other hand, calcium sulfate was dispersed within grains in the case of that without treatment by water. This is because anhydrous calcium sulfate particles, which were hardened by hydration, are larger than hemihydrous calcium sulfate. The reasons for lower performance of dry ground powder without treatment by water are considered that much S remained in the sintered body and calcium sulfate was dispersed within grains.