To develop largescale magnetostrictive displacement sensor (MDS), the energy attenuation of stress wave is studied. A novel test method of attenuation coefficient is proposed in this work, in which the expression of attenuation coefficient and its correction method are involved. The experimental platform of MDS is set up to test the attenuation coefficients of the stress wave propagating in FeGa and FeNi waveguides. Moreover, the effects of wire diameter, stress wave frequency and stress on the attenuation coefficient are analyzed and determined. Experimental results show that the stress wave attenuation coefficients of FeGa and FeNi waveguides with 0.6 mm wire diameter are 0.154 8 Np·m－1 and 0.180 8 Np·m－1, respectively, under 54 kHz and in the absence of stress. The attenuation coefficient increases as the wire diameter and the frequency of stress wave increases. The attenuation coefficient decreases first and then trends towards stability as the stress increases. Therefore, to reduce the attenuation of the stress wave in the production of a largescale MDS, the diameter of FeGa waveguide wire, stress wave frequency and stress are 0.4 mm, 32 kHz and 60 MPa, respectively.