A fine strontium ferrite powder with high coercivity was successfully prepared by forming hydroxide precursor particles in the continous ethanol-based phase of a microemulsion consisting of iso octane, NP9, and an ethanol solution containing Sr2+ and Fe3+ cations at a molar ratio of 1:12. The microemulsion derived hydroxide precursor was calcined at various temperatures, ranging from 600 degrees to 1100 degrees C, to develop the hexagonal strontium ferrite phase. X-ray diffractometry and infrared characterizations revealed that the formation mechanisms of strontium ferrite in the microemulsion-derived precursor differed from those of the precursor derived by conventional coprecipitation. The microemulsion resulted in a strontium ferrite of finer particle size and better magnetic properties than those of the conventionally coprecipitated strontium ferrite. The microemulsion-derived strontium ferrite exhibited an intrinsic coercivity of 6195 Oe and a saturation magnetization of 58.28 emu/g when calcined at 900 degrees C. The saturation magnetization increased further, to 69.75 emu/g, when the microemulsion-derived precursor was calcined at 1100 degrees C.