The magnetic susceptibility of loess from the Ily Basin, northwestern China shows maximum values in S0 paleosols but minimum values in other paleosols, the mechanism of which has been well debated. In this work, systematic magnetic measurements were made on a representative section from Neleke county. The results show that the loess horizons (L1, L2 and L3) have multi-domain magnetite grains of aeolian origin, S0 is characterized by production of pedogenetic ultrafine-grained ferrimagnetic minerals, and the other paleosols (S1, S2, and S3) are characterized by the formation of nonferrimagnetic minerals associated with waterlogging. The correlation between the low concentration of ferrimagnets, high paramagnetic content, high magnetic coercivity remanence, fine ferrimagnetic grain size and intensified pedogenesis suggest two competing processes of pedogenetic enhancement and pedogenetic depletion in the lower paleosols. Pedogenetic depletion dominates and is responsible for the low susceptibility. Changes in magnetic grain size distribution occur during pedogenetic depletion. The susceptibility variations are of multiple origins in the loess of the Ily Basin. Pedogenetic enhancement, pedogenetic depletion, and allochthonous input of magnetic minerals should all be taken into account to explain the variations of magnetic parameters.