In this paper we analyze the stress distribution around the cavity in a
magnetized medium subjected to magnetic induction. Firstly, a pertinent
variational principle which is based on large deformation theory is proposed for the analysis. Then, on the basis of Pao-Yeh magneto-elastic theory, the linearized governing equations and the boundary conditions can be derived accordingly. In order to demonstrate the whole formulation, we consider that a circular cavity embedded in the magneto-elastic medium subjected to a uniform magnetic field, in addition, only the effects of rigid body state are considered. By using the complex function technique, the stress distribution around the cavity can be obtained. The possible application of the formulation is also addressed and discussed.