Highly Bi‐substituted garnet films (BiLu)3Fe5O12(Bi=0.89/f.u.) have been grown on (111)‐oriented Gd3Ga5O12substrates by liquid‐phase epitaxy with only Bi2O3as a flux. The specific Faraday rotation &thgr;Fattains −0.14 deg/&mgr;m at 1.3 &mgr;m. Guided‐optical‐wave propagation loss of 0.6 dB/cm at 1.3 &mgr;m is obtained by doping an appropriate amount of MgO in the melt. Magnetostatic backward volume wave (MSBVW) is launched efficiently into the film as expected from the measured small ferromagnetic resonance linewidth of 0.7 Oe, whereas magnetostatic surface wave and magnetostatic forward volume wave are subject to the severe attenuation due to their coupling to spin‐wave modes. The interaction between guided optical wave and MSBVW is investigated in a transverse configuration where the input optical wave passes almost orthogonal to MSBVW. The TM‐TE optical‐mode conversion induced by MSBVW is observed over the frequency range of 3.5–7.5 GHz. Its efficiency, as high as 47%/0.8 W at 4 GHz, is obtained for the interaction length of 7 mm.