There are provided a permanent magnet and a manufacturing method thereof enabling carbon content contained in magnet particles to be reduced in advance before sintering even when wet milling is employed. Coarsely-milled magnet powder is further milled by a bead mill in a solvent together with an organometallic compound expressed with a structural formula of M-(OR)X (M represents V, Mo, Zr, Ta Ti W or Nb, R represents a substituent group consisting of a straight-chain or branched-chain hydrocarbon, X represents an arbitrary integer) so as to uniformly adhere the organometallic compound to particle surfaces of the magnet powder. Thereafter, a compact body of compacted magnet powder is held for several hours in hydrogen atmosphere at 200 through 900 degrees Celsius to perform hydrogen calcination process. Thereafter, through sintering process, a permanent magnet 1 is formed.