Cluster-assembled Tb-Fe nanostructured films were prepared by the low energy cluster beam deposition method. The microstructure, magnetization and magnetostriction were investigated for the films. It is shown that the film is assembled by monodisperse spherical nanoparticles with average diameter of ∼30 nm which are distributed uniformly. The cluster-assembled Tb-Fe nanostructured films exhibit good magnetization and possess giant magnetostriction with saturation value of ∼1060 × 10(-6), much higher than that of the common Tb-Fe films. The origin of good magnetization and giant magnetostriction for the cluster-assembled Tb-Fe nanostructured film was discussed. The present work opens a new avenue to produce the nanostructured magnetostrictive alloy in application of a nano-electro-mechanical system.