A new complete set of basic equations for magnetic fluids having good conductivities of heat and electricity with internal rotation has not been derived yet. In the present paper, governing equation s for such conducting magnetic fluids are formulated by the thermodynamical method, in which free energy and dissipation function are used on the basis of kinematical balance equations in the micropolar fluid theory. A simple method for determining a constitutive equation of magnetization has come out of use. it is shown that the equations obtained in the present paper involve almost all equations for nonconducting magnetic fluids derived here is more generalized and stricter than those previously presented. Hence, they will make it possible to treat rapid changes of magnetic field by the present theory.