The magnet powder-resin compound particles substantially composed of rare earth magnet powder and a binder resin are in such a round shape that a ratio of the longitudinal size a to the transverse size b (a/b) is more than 1.00 and 3 or less, and that an average particle size defined by (a/b)/2 is 50-300 .mu.m. They are produced by charging a mixture of rare earth magnet powder and a binder resin into an extruder equipped with nozzle orifices each having a diameter of 300 .mu.m or less; extruding the mixture while blending under pressure though the nozzle orifices to form substantially cylindrical, fine pellets; and rounding the pellets by rotation.