Terfenol-D, known as a giant magnetostrictive material, is used in many sensors such as force sensor. In these sensors, external force is measured due to variation of magnetic flux density passing through Terfenol-D. To improve the performance, Terfenol-D is exposed to bias magnetic field and mechanical pre-stress. In this paper, Effects of bias magnetic field and mechanical pre-stress on sensitivity and linear measurement range of a force sensor are studied and optimum values of them are recognized. Initially based on magnetomechanical coupling equations, theoretical model of sensor that includes effective parameters on sensitivity and linear measurement range is developed. Then using experimental set-up, magnetomechanical properties of Terfenol-D are investigated and values of essential parameters for theoretical model are extracted. Finally, employing theoretical model and experimental results, the response of sensor under dynamic external forces is simulated and effects of bias magnetic field and mechanical pre-stress on sensitivity and linear measurement range of the sensor are studied. Based on the obtained results, to increase sensitivity and linear measurement range of sensor, values of bias magnetic field and mechanical pre-stress should be relatively determined considering the amplitude of external force.