A theoretical investigation is made on the mechanism of noise in magnetic recording tape coated with magnetic particles. It is shown that, for the tape in saturated remanence, noise does not originate from the finite size of particles, but from other factors such as finite concentration of particles, voids, aggregation of particles, and periodic imperfection. For demagnetized tape, however, those factors give a negligible noise. Hence, the origin of noise in the magnetized tape differs from that in the demagnetized one.It is also shown that the theoretical results agree with the experiments by taking into account the fact that the true volume of single particles is smaller than the apparent volume. The theoretical signal‐to‐wideband‐demagnetized‐tape‐noise ratio is independent of tape velocity and is about 56 db for the commercial audio tape of ¼‐in. track width.