Lithology and soil formation affect magnetic susceptibility and its distribution along soil pedons. Kerman province in Iran is typical for variable lithology. However, only limited data on soil magnetic susceptibility in this province and its relation to the lithology are available. We investigate the effect of soil properties and processes on magnetic susceptibility values of soils with different geology in central Iran. Seven soil pedons with different lithology including sedimentary and igneous bedrocks were selected in arid and semi-arid parts of northern Kerman. Routine physical and chemical properties, different forms of iron, and mass-specific magnetic susceptibility values were measured in all the collected samples. Four selected samples underwent magnetic separation. Two of them, which yielded the highest amount of magnetically extracted material, were subjected to X-ray diffraction analysis. In addition, polished sections from the sample with the highest mass-specific magnetic susceptibility were prepared. The results show that lithology strongly affects the magnetic susceptibility in the studied soils, ranging from the minimum value of 4.3 × 10−8 m3 kg−1 (in the soils developed on Cretaceous marls and limestone) to 1264 × 10−8 m3 kg−1 (on andesite rocks). Frequency-dependent susceptibility values of soils (from 0 to 5.3%) showed that coarse multi domain grains inherited from parent material were the main source of magnetism in the area under study. The average amount of free, non-crystalline, crystalline, and active iron oxides in the studied samples were 0.5, 9.96, 8.45, and 0.05 g kg−1, respectively. The weighted mean for different factors was calculated in three depth ranges. Slope of linear regression was used to investigate the relation between mass-specific susceptibility and physicochemical parameters for different soil depths. The argilluviation process caused a decrease in the magnetic susceptibility in moderately developed soils of the region. The highest magnetic susceptibility values were found for Cambic Calcisols, followed by the Abruptic Solonetz, both developed on the andesite and gypsiferous marl. A positive relationship between magnetic susceptibility and Feo, Fed and Fed — Feo, and a negative correlation between magnetic susceptibility and Feo/Fed were found. According to X-ray diffraction analyses, diamagnetic minerals are dominant, while antiferromagnetic minerals are rare. The results suggest that changes in the magnetic susceptibility values are highly affected by the processes of soil formation, lithology, and soil classification.