Two laser processes, flat plate ablation (FPA) and laser ablation of microparticle aerosols (LAMA), capable of producing nanoparticles and nanoparticulate thick films of Terfenol-D (Fe1.92Tb0.3Dy0.7) were investigated. The influence of processing parameters on the sizes, compositions, and morphologies of the nanoparticles produced using these processes were studied by transmission electron microscopy. The nanoparticles were used to deposit nanoparticulate films by supersonic impaction with thicknesses ranging from 4 to 50 μm, depending on processing conditions. The microstructures and properties of the films were studied using scanning electron microscopy and magnetometry. The LAMA process produced nanoparticles with a mean size and standard deviation (SD) of 8 to 10 nm ± 5 nm, depending on the type of gas used during synthesis. In contrast, nanoparticles produced using the FPA process exhibited a much broader size distribution varying from 5 to 150 nm and a much greater variation in compositions compared to the LAMA process. Films produced using LAMA also had lower levels of porosity compared to those produced using FPA as a result of the smaller, more uniform nanoparticles from which they were produced and the resulting higher impaction velocities. Compared to the FPA-produced films, the LAMA-produced films exhibited greater resistance to oxidation, higher magnetizations (13–15 emu/g versus 9–11 emu/g, depending on processing conditions) and lower coercivities (versus 41–59 Oe versus 80–110 Oe).