The Small Magellanic Cloud (SMC) has surprisingly strong submillimeter- and millimeter-wavelength emission that is inconsistent with standard dust models, including those with emission from spinning dust. Here, we show that the emission from the SMC may be understood if the interstellar dust mixture includes magnetic nanoparticles, emittingmagnetic dipole radiation resulting from thermal fluctuations in themagnetization. Themagnetic grains can be metallic iron, magnetite Fe sub(3)O sub(4), or maghemite gamma-Fe sub(2)O sub(3). The required mass of iron is consistent with elemental abundance constraints. Themagnetic dipole emission is predicted to be polarized orthogonally to the normal electric dipole radiation if the nanoparticles are inclusions in larger grains.We speculate that other low-metallicity galaxies may also have a large fraction of the interstellar Fe in magnetic materials.