High-resolution environmental magnetic measurements were carried out on Core MD77-181 in the Bay of Bengal, including magnetic susceptibility, anhysteretic remanent magnetization, isothermal remanent magnetization of all samples, and temperature-dependence of magnetic susceptibilities and magnetic hysteresis parameters of representative samples. The results suggest that (1) the magnetic mineral assemblage of the upper 9.82 m sediments (corresponding to the last 160 ka) is dominated by pseudo-single domain magnetite, with more abundant coarse grains in glacial periods than in interglacial periods; (2) the uppermost 6.50 m of sediments (corresponding to the last 70 ka) shows significant temporal variations in grain sizes of magnetic minerals, possibly reflecting the teleconnection between variations of the Indian summer monsoon and rapid cold events of the North Atlantic (Heinrich events); (3) the sediments below 9.82 m are dominated by paramagnetic minerals (probably including pyrites), suggesting reductive diagenesis. The magnetic records of Core MD77-181 are comparable to those of Core MD77-180 in the Bay of Bengal, and ODP Hole 722B in the Arabian Sea. This study suggests that the paleoceanographic event at ～160 ka significantly changed the redox state of the northern Indian Ocean, from a reductive environment before the event to an oxic or suboxic environment after the event.