Commercial purity raw materials have been used to prepare grain-aligned Tb 0.3Dy 0.7Fe 1.95 rods. The effects of material structure and heat treatment on magnetostriction were investigated. It was found that grain orientation was crucial to the magnetostrictive properties and had a stronger effect than lamellar spacing. The effect of heat treatment depended greatly on material structure and annealing temperature. High temperature annealing up to 1150 °C was needed for samples with narrow lamellar spacing to get an obvious rise in their compressive magnetostrictive properties. Under 10 MPa compressive stress, typical magnetostriction values were 1500 ppm in 4 kOe applied field and 1000 ppm in 1.5 kOe. The magnetostriction variation for one lot of 10 rods was no more than 200 ppm.