When the photovoltaic (PV) system suffers shading problems caused by different degrees and areas, the shaded PV cells will consume electricity and generate heat, the corresponding bypass diode operating at a certain current will conduct, and a special magnetic field will be generated in space. In this study, a magnetostrictive-based shading detection method and device for the PV system are developed from theoretical, simulation, and physical experimental aspects. This study aims to detect the special magnetic field using magnetostrictive material with a certain response pattern under the magnetic field to detect and locate the shading problem of each module in the PV system. Theoretically, the analysis is carried out from the on–off situation of the bypass diodes of PV modules under different shading conditions and the response mechanism of magnetostrictive materials under the action of the magnetic field. During simulation, the finite element magnetic field simulations are performed for the diode and the series magnetic field coil, and the structural parameters of the magnetic field coil are designed based on the simulation results. After establishing the validation idea of the detection method in this study, the experimental platform is built and the experimental steps are designed. Finally, the feasibility of the method proposed in this study is verified, the detection range of the method is calculated, and the minimum spacing of adjacent magnetic field coils is determined by experimental validation. This study provides a novel magnetostrictive-based detection method, as well as a theoretical and experimental basis, for identifying and localizing PV system shading problems, and discusses the feasibility of shading detection at the system level.