There’s a perfectly good tut on lifehacker but I wanted to copy it here so that 6mo down the road, when I want to do this again, I don’t have to worry about the link being dead.

There are reports that the rename trick has been squashed, but I haven’t verified. So this is the GarageBand way. Which also means it’s Mac only … which is fine, this is for me so I have a guide on how to do it next time. And I have a Mac.

So fire up iTunes and GarageBand, find the song you want to turn into a ringtone (this is of course assuming that what you want as a ringtone is already in iTunes) and drag it from iTunes into GarageBand. If it’s not in iTunes, just open the file in GarageBand right?

Now that the file is in itunes click on the Cycle Region button

which activates the region loop tool (images stolen from LifeHacker)

Now adjust the region to the section of the song you want; it has to be < 40sec and I've found that sometimes GarageBand complained and wouldn't export certain selections > 30sec. I don’t know what the criteria is that it’s using, but I’ve also never created a ringtone this way that didn’t work in iTunes/iPhone so I’m fine with it. A small tipe that LifeHacker doesn’t mention, I like to do a tiny bit of fading at the beginning and the end of the selection so that the transition isn’t so abrupt.

Lastly, and this is the beautiful part, Share -> Send Ringtone to iTunes.