It is well known that FePd alloys are effective as a magneto-thermoelastic actuator material, because they have large magnetostriction and shape memory effect. In order to use the alloys for a micro-actuator, magnetic properties and microstructures have been examined as for rapidly solidified Fe-29.6 at% Pd alloy ribbons. The ribbons exhibit a large magnetostriction at room temperature and good shape memory effect. Magnetostriction and coercive force of the ribbons markedly depend on the direction of the applied magnetic field. Maximum values of magnetostriction and coercive force are obtained at θ = 85 degree (θ is the angle between the magnetic field and the ribbon plane). Relief effects corresponding to the formation of FCT martensite variants are observed on the grains. X-ray diffraction profile at room temperature shows that FCT martensitic phase and FCC parent phase coexist in the ribbon. Dense striations are observed in the TEM bright field images of FCT martensite plates. Selected area electron diffraction patterns revealed the striations to be thin twins.