The design and analysis of a low-frequency, resonant, tonpilz type, rare earth iron underwater sound transducer using rods of Tb.27Dy.73Fe1.95 are described. An equivalent circuit is presented which predicts the performance of the transducer in the presence of eddy currents and demagnetization. The effect of eddy currents on the impedance of a rod is discussed. The predicted performance of a laminated transducer is compared with that of an unlaminated transducer. 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. Advantages, disadvantages, and possible uses of rare earth iron material are discussed.