An amorphous bimetal ribbon consisting of magnetostrictive (Fe40Ni40B20) and nonmagnetostrictive (Co67Fe4Cr7Si8B12) layers was prepared by planar flow casting from a double‐chamber crucible. The effect of applied tensile stress on hysteresis loops and the surface domain structures of the stress‐relieved bimetal was investigated at room temperature. The hysteresis loops can be well explained by superpositions of hysteresis loops of the individual layers. Only the magnetostrictive layer is responsible for the influence of applied stress on magnetic behavior. At a certain stress, the magnetic anisotropy of the magnetostrictive layer abruptly changes from a hard‐ribbon‐axis to an easy‐ribbon‐axis type. This transition is accompanied by a change of domain structure and a sharp maximum of the coercive field. A simple model taking into account an interplay of the applied tensile stress with the compressive stress produced by thermal contraction after stress relief and/or by bending of the ribbon has been developed. The observed behavior can be well explained by the model. ©1995 American Institute of Physics.