The effects of the heat treatment of Bi‐substituted magnetic garnets in a flowing oxygen containing ozone with less than a few vol % (O3annealing) on the optical absorption &agr; in a near‐infrared spectral region and on the ferromagnetic resonance linewidth &Dgr;Hhave been investigated in detail. By O3annealing for typically 3 h at a temperature of 700 °C and subsequent O2annealing around 500 °C, the &agr; is reduced to less than 1 dB/cm at a wavelength of 1.3 &mgr;m, and also the &Dgr;His reduced to 0.8 Oe at 9 GHz in a very reproducible manner. The reduction of both &agr; and &Dgr;His thought to be caused by the decrease of Fe2+ions originally formed mainly by oxygen vacancies. The only negative point of O3annealing is that it inevitably accompanies some surface damage probably caused by the attack of oxygen atom radicals produced by the thermal dissociation of ozone which affects magnetostatic surface waves so as to increase the insertion loss. However, this problem has been successfully solved by protecting the surface with a thin oxide layer such as a Ta2O5on. O3annealing with a protective oxide layer on is extremely valuable because &agr; is still reduced effectively and magnetostatic surface waves can propagate with a smaller insertion loss.