Wastewater containing fats, oils and grease (FOG) is problematic in several ways: foul odors, blockage of sewer lines, interference with the proper sewage treatment operation and excess amount of FOG that can lead to certain fines for responsible wastewater generator. In this paper, the magnetic coagulation process is used to destabilize the oily wastewater emulsions while assisting with the oil floc formation. The oil/magnetic powder flocs were subsequently deposited and removed with the assistance of magnetic field. Preliminary investigations were devoted to calculations of optimal magnetic field. Preliminary investigations were devoted to calculations of optimal magnetic powder proportions were devoted to calculations of optimal magnetic powder proportions of various sizes and their oil sorption capacity. The results from the jar test confirmed the effectiveness of the magnetic coagulation procedure. It was demonstrated that the magnetic coagulation process with optimum amount of magnetic powder of 12 g/L could remove 94.2% of FOG, 96.9% of total suspended solids (TSS), and 86.7% of chemical oxygen demand (COD) on average.