This paper investigates the origin of large magnetostriction in Fe–Ga alloys using small-angle neutron scattering (SANS) and Kerr microscopy. The SANS data for a single-crystal, electron irradiated, and quenched Fe₈₁Ga₁₉ sample under externally applied magnetic and elastic fields revealed the existence of magnetostrictive nanoclusters spaced at ∼15 nm apart that have a different magnetization than the A2 matrix. Combining the SANS results and the magnetization orientation obtained from the magnetic domain images using a Kerr microscope, it appears that the nanoclusters contribute significantly to the macroscopic magnetostriction.