Adopting modified Bridgman technique, alloy of Tb 0.3 Dy 0.7 Fe 1.95 was directionally solidified at 70cm/h under decreasing temperature gradient, starting from 100°C/mm and studied for microstructural features, grain orientation and magnetostriction. At the onset of solidification, <110> texture nucleates and grows. As the solidification front moves away from the chilled end, the texture changes to <211>, which is favourable for obtaining large magnetostriction. However, a contradictory effect is seen in the microstructure, wherein the deleterious pro-peritectic (Tb,Dy)Fe 3 starts appearing, when the solidification front moves away from the chilled end. As a result, the beneficial effect of achieving <211> texture is subdued by the detrimental effect caused by the formation of pro-peritectic phase.