Provided is iron silicide powder in which the content of oxygen as the gas component is 1500 ppm or less, and a method of manufacturing such iron silicide powder including the steps of reducing iron oxide with hydrogen to prepare iron powder, heating the iron powder and Si powder in a non-oxidizing atmosphere to prepare synthetic powder containing FeSi as its primary component, and adding and mixing Si powder once again thereto and heating this in a non-oxidizing atmosphere to prepare iron silicide powder containing FeSi.sub.2 as its primary component. The content of oxygen as the gas component contained in the iron silicide powder will decrease, and the iron silicide powder can be easily pulverized as a result thereof. Thus, the mixture of impurities when the pulverization is unsatisfactory will be reduced, the specific surface area of the iron silicide powder will increase, and the density can be enhanced upon sintering the iron silicide powder.