$gamma$-FeOOH suitable for magnetic recording media was synthesized using waste acid which is the by-product of the iron works factory. Effects of concentration of the acid and alkali and reaction temperature on the particle properties of $gamma$-FeOOH and magnetic properties of $gamma$-$Fe_2O_3$ were studied. $gamma$-FeOOH single phase was formed below 1M of acid concentration with 1M of alkali concentration and at 0.4M of acid concentration with 4M of alkali concentration. While the width of acicular particle was increased, the length of acicular particle was decreased with diluting acid concentration. The magnetic properties of the $gamma$-$Fe_2O_3$ improved with increasing acid concentration. $gamma$-FeOOH single phase was formed in the temperature range of 30 to $80^{circ}C$. The length of the particle was decreased with increasing temperature. $gamma$-Fe2O3 produced from dehydration of $gamma$-FeOOH showed bad magnetic properties due to the presence of many pores in the particle. But with successive reduction and oxidation of $gamma$-$Fe_2O_3$ produced from dehydration of $gamma$-FeOOH, $gamma$-$Fe_2O_3$ showed good magnetic properties.