Mechanical finishing offerrite materials used in magnetic storage systems are found to have a shallow magnetically inactive layer due to residual elastic stress in the surface. The residual stresses in ground and lapped Ni-Zn surfaces are measured and compared with comparable values for steel. Whereas the residual stress in a diamond ground ferrite surface is of predominantly mechanical origin (compressive) that in a conventionally ground steel surface is predominantly of thermal origin (tensile). Methods of reducing the residual stress in a lapped ferrite surface are discussed. © 1987 by ASME.