In 1896, he became Bishop of Krk (Croatia). In his bishopric he initiated many religious societies and activities, and started Catholic publishing, including a magazine for Christian philosophy called Hrvatska straža. He founded Catholic student magazines and societies all over the Austro-Hungarian Monarchy. He wrote many articles and works in the theological, philosophical, esthetical and political area. Later Mahnić initiated a Pius society, with its weekly newspaper Jutro. These groups of Catholic intellectuals, gathered around these papers, joined together in the Croatian Catholic movement) before the First World War. After the War, Mahnić was persecuted during the Italian occupation, and he went to Zagreb, where he died.
Mahnić's main goal was defending and promoting Catholic faith and its moral principles in Croatian public and social life, which were endangered by liberalization and secularization. Also important issue for him was spiritual and intellectual education of the youth.