Miniature magnetometer is desired in many applications, such as undersea surveillance, buried landmine detection, vehicle tracking and guidance and personal dosimetry. This dissertation reports the fabrication, and characterization of a miniature magnetometer, which utilizes the highly magnetostrictive material, Terfenol-D and an ultra-short external cavity diode laser sensor. A thin slice of the magneto strictive material, biased by an open magnetic circuit, is configured as an external reflector modulating the effective modal reflectivity of the diode laser cavity in response to an ac magnetic field. The detection limit of the sensor are being investigated and the principle of the device is being examined as an abruptly terminated dielectric waveguide problem. Numerical results are obtained. Furthermore, the spatial variation of the magnetostriction amplitude across the transducer is being examined with a heterodyne interferometer. Suggestions are provided on improving the device performance, and extending the numerical capability to account for non-ideal reflector. Other metrology applications using the diode laser sensor is discussed.