Convective instability of a ferromagnetic fluid is predicted for a fluid layer heated from below in the presence of a uniform vertical magnetic field. Convection is caused by a spatial variation in magnetization which is induced when the magnetization of the fluid is a function of temperature and a temperature gradient is established across the layer. A linearized convective instability analysis predicts the critical temperature gradient when only the magnetic mechanism is important, as well as when both the magnetic and buoyancy mechanisms are operative. The magnetic mechanism predominates over the buoyancy mechanism in fluid layers about 1 mm thick. For a fluid layer contained between two free boundaries which are constrained flat, the exact solution is derived for some parameter values and oscillatory instability cannot occur. For rigid boundaries, approximate solutions for stationary instability are derived by the Galerkin method for a wide range of parameter values. It is shown that in this case the Galerkin method yields an eigenvalue which is stationary to small changes in the trial functions, because the Galerkin method is equivalent to an adjoint variational principle.