Phonon dispersions of γ‐Fe were calculated by small displacement methods using density functional theory where the exchange-correlation potential was approximated by the general gradient approximation. Magneto-volume coupling coefficient was estimated to be 2.74×10−3μB−2. The phonon dispersions were in good agreement with the experimental data. Results showed that the dispersions were quite sensitive to the magnetic moment. The phonon frequency along ΓX became negative when the system was spin polarized. The softening of the phonon was attributed to the high density of states at the Fermi level. Our results indicate the importance of taking magnetization into account when the equation of states of γ‐Fe are to be established.