Pronounced differences in concentration, alignment and grain-size distribution of the magnetic minerals have been identified between loess and palaeosol samples from the section at Xifeng (Central Chinese loess plateau). Superparamagnetic magnetite formed in situ plays an important role in controlling magnetic low field susceptibility. The variable brown-red colouration of the loess-palaeosol sequence is due to a significant hematite component produced by pedogenesis. The magnetic fabric of the palaeosols is weaker than that of the loesses. This is taken as evidence that the formation of ultrafine ferromagnetic minerals by pedogenesis is the most likely explanation for the observed susceptibility enhancement in palaeosols (4 to 10 times higher than in loesses). It is argued that variations of frequency dependent susceptibility are sensitive recorders of second order palaeoclimatic variations during glacial periods, whereas bulk susceptibility seems to be an appropriate measure of palaeoclimate change during interglacial periods.