A low‐frequency, resonant, longitudinally vibrating piston‐type rare earth iron underwater sound transducer using rods of 27% terbium – 73% dysprosium iron (Tb0.27Dy0.73Fe1.95) is described. The performance of the rare earth iron transducer is compared with the performance of the same transducer with identical ceramic active elements. Data on transmitting current response, transmitting voltage response, free‐field voltage sensitivity, coupling coefficient, efficiency, and linearity are presented. An equivalent circuit is presented which predicts the performance of the transducer in the presence of eddy currents and demagnetization. The predicted performance of a laminated transducer is compared with that of an unlaminated transducer. Advantages and disadvantages of the rare earth iron material are discussed.