Giant magnetostrictive material Terfenol-D (TbxDy1-xFe2-y, 0.27 less than or equal to x less than or equal to 0.30, 0.05 less than or equal to y less than or equal to 0.1) was directionally solidified by vertical Bridgman method within a sealed quartz crucible. Macrosegregation of RE elements along the growth axis occurred in an abnormal way. RE elements concentration decreased significantly with increasing axial distance, which is different from the typical macrosegregation with a distribution coefficient, ii, less than unity. This was due to the compositional inhomogeneity of the initial melt. During the melting of the prealloyed ingot in the quartz crucible, eutectic RE-rich phase melted first and flowed out into the gap between the crucible and the ingot. This RE-rich phase which flowed to the bottom did not mix well with the melt by convection because the temperature distribution in the melt is quite stable and the density of the RE-rich phase is higher than that of the REFe2 phase. Macrosegregation was reduced very much in the rod grown after the homogenization of the initial melt. Even though the magnetostrictive strain was very different from part to part in the as-grown rod due to the macrosegregation, each specimen came to have a similar magnetostriction after the heat treatment above the eutectic temperature (890 degrees C). During the high-temperature annealing, excess RE-rich phase was observed to be melted and flowed out from the specimen leaving pores between REFe2 matrices. Therefore, composition of the crystal approached to the stoichiometic value regardless of the initial composition. That makes magnetostriction of the samples similar to one another. Melt extraction during the annealing is thought to be the result of poor wetting between the two phases.