It is concluded from torque measurements on single crystals of Alnico 5 that the high coercive force of these crystals depends upon the shape anisotropy of the fine precipitated plates and that the crystal anisotropy of the plates is negligible. The present physical picture of the alloy is that it consists of plates of precipitate of high magnetic saturation separated by a matrix of comparatively low magnetic saturation. The plates are made up of rods of precipitate (approximately 75 A in diameter ×400 long), but they act magnetically like single domain plates. The magnetization vector turns in the plane of the plates, and it is the length‐to‐width dimension ratio of the plates which determines the effective shape anisotropy and the resulting coercive force of the alloy.