The transformation of α-FeOOH into γ-Fe2O3via Fe3O4is studied in order to determine the influence of the reduction temperature on the magnetic and rheological properties of the final product. The study was carried out both on pure and on silica coated α-FeOOH. It was found that the reduction temperature at which a maximum of coercivity is obtained, varies with particle size, and it is much higher for silica coated samples which also show higher coercivity at the optimum reduction temperature. Coercivity factors (CF percent) and Mr/Ms values are also dependent on particle size. It is shown that coating with silica enables the reduction to be carried out at higher temperatures without significant collapse of the acicular shape.