There is provided a method of manufacturing a toner, using a shearing force for granulation, in which bubbles are prevented from arising upon application of the shearing force, thus manufacturing a diameter-reduced toner having a particle diameter of about 5 .mu.m which is favorable for enhancement in definition and resolution of images. Upon granulating after a kneaded product of toner raw material is mixed with water dispersion, an interior part of granulating system is heated and pressurized and moreover, both of the shearing force and collision force are applied to the kneaded product of toner raw material by use of a high-speed rotating dispersion type granulator composed of a cylindrical pressure-resistant container, a spinning rotor, following screens, and a fixed screen.