This paper describes analysis of journal bearings lubricated with ferrofluid, which are very suitable for high speed machines. Comparing to conventional lubricants, the coupling of hydrodynamic, thermal and magnetic properties of ferrofluid adds to the complexity in analysis. Modified Reynolds equation and energy equation are derived and solved numerically using finite volume method. Pressure distribution is got which takes temperature effect into consideration. Static characteristics are then discussed. One optimal scheme is also got according to analysis results.