A theory which accounts for the well-known discrepancy between predicted eddy-current losses in electrical sheet steels and the experimentally observed values is presented. The anomaly is shown to be due partly to the magnetic inhomogeneity arising from ferromagnetic domain structure and partly to a time-lag effect caused by the finite domain boundary movements. A new experimental approach speed of to the study of the eddy-current anomaly is described. This involves the use of a method of measuring the anomaly factor as it applies instantaneously at a point in a magnetization cycle.