Magnetic behavior of soils can seriously hamper the performance of geophysical sensors. Currently, we have little understanding of the types of minerals responsible for the magnetic behavior, as well as their distribution in space and evolution through time. This study investigated the magnetic characteristics and mineralogy of Fe‐rich soils developed on basaltic substrate in Hawaii. We measured the spatial distribution of magnetic susceptibility (χlf) and frequency dependence (χfd%) across three test areas in a well‐developed eroded soil on Kaho'olawe and in two young soils on the Big Island of Hawaii. X‐ray diffraction spectroscopy, x‐ray fluorescence spectroscopy (XRF), chemical dissolution, thermal analysis, and temperature‐dependent magnetic studies were used to characterize soil development and mineralogy for samples from soil pits on Kaho'olawe, surface samples from all three test areas, and unweathered basalt from the Big Island of Hawaii. The measurements show a general increase in magnetic properties with increasing soil development. The XRF Fe data ranged from 13% for fresh basalt and young soils on the Big Island to 58% for material from the B horizon of Kaho'olawe soils. Dithionite‐extractable and oxalate‐extractable Fe percentages increase with soil development and correlate with χlf and χfd%, respectively. Results from the temperature‐dependent susceptibility measurements show that the high soil magnetic properties observed in geophysical surveys in Kaho'olawe are entirely due to neoformed minerals. The results of our studies have implications for the existing soil survey of Kaho'olawe and help identify methods to characterize magnetic minerals in tropical soils.