The effect of phosphorus (P) on magnetic properties and also on recrystallization texture of non-oriented electrical steel sheets has been investigated to develop core materials with low core loss and high permeability. Specimens containing different amounts of P were cold-rolled to various thicknesses, i.e. with various cold-rolling reductions, and annealed for recrystallization and grain growth. Magnetic induction of the steel with a large amount of P was higher than that of the steel with a small amount of P. Moreover, magnetic induction of the steel with a large amount of P slightly decreased with reduction of sheet thickness, i.e. with an increase in cold-rolling reduction, whereas magnetic induction of the steel with a small amount of P dramatically decreased. The most effective way to reduce core loss was to reduce thickness of electrical steel sheets. Therefore, P-bearing thin gauge non-oriented electrical steel sheets achieved low core loss and high permeability. The typical magnetic properties of P-bearing non-oriented electrical steel sheets with a thickness of 0.27 mm were 16.6 W/kg in W10/400 and 1.73 T in B50. These excellent magnetic properties were provided by the recrystallization texture control by P. {111}‹112› component in recrystallization texture, which deteriorates magnetic properties of electrical steel sheets, was suppressed during recrystallization. Furthermore, {φ1, Φ, φ2} = {25°, 10–15°, 45°} component significantly developed at the expense of {111}‹112› component during grain growth. P segregation at initial grain boundaries would be responsible for this texture evolution. Accordingly, P would greatly contribute to the improvement of magnetic properties of non-oriented electrical steel sheets through the recrystallization texture control.