Li-ferrite powders were prepared from mixture of Fe and Li salts using a hydrothermal method. Their crystal structure, microstructure and magnetic property were investigated with X-ray diffraction analysis, chemical analysis, SEM, and VSM. In the case of using FeCl3 as a precursor, Li-ferrite powders were synthesized. However, Fe3O4 was formed when the precursor was a divalented Fe2SO4 or FeCl2. The precipitation rate of Li-ferrite was increased as the reaction temperature increased. The optimum conditions of synthesis were the mole ratio of Fe+++/Li+=2, pH 13, the reaction temperature of 25$0^{circ}C$ and the reaction time of 120min. With this condition, the spherical particles with good dispersion were obtained with average particle size of 0.4${mu}{ extrm}{m}$ and saturation magnetization of 65 emu/g.